The number of new jobs created by small businesses totaled 45,000 in February, down from 55,000 in January. While that stat may look dismal on its own, it’s important to keep in mind that despite the drop in growth, there’s still growth.
Intuit plans to recalibrate its Employment Index in the coming months and expects the aforementioned numbers to be lower. This is a common statistical practice and the recalibration will be based on new data provided by the Bureau of Labor Statistics, which are used as inputs into the Index.
According to Susan Woodward, the economist who works with Intuit to create the Index, “The hiring rate is slightly down on a seasonally adjusted basis, and sits at about half of what it was before the recession was underway. The low hiring rate reflects the reluctance of employees to leave their jobs in such an unsecure job market, so employers do not need to hire to replace them. This phenomenon is present in firms of all sizes, and is not unique to small firms.”
The February 2012 Index, which covered the period between Jan. 24 and Feb. 23, also found that average monthly hours worked decreased slightly, by 0.04 percent, or six minutes, and average monthly compensation increased by 0.15 percent, or $4 per worker.
Woodward adds, “As an overall trend, employment is up modestly, but the number of hours worked by hourly employees is about the same as last month, seasonally adjusted. Compensation is up very slightly in dollar terms, but adjusted for inflation, it is essentially flat. ”
Interestingly, the biggest gains last month were seen in the states that suffered most from the recession – the majority of the western states, plus Florida – while New York continued to look softer than the rest of the country. The Intuit Index showed employment growth in all census divisions, except for the East North Central region.
For more details and fast facts about February’s Index results, check out index.intuit.com.