SMALL U.S. COMPANIES LOSE ALMOST 300,000 JOBS SINCE FEBRUARY
Small companies have shed jobs in three of the last four months, with some indication that this vital pillar of the U.S. economy is feeling the pinch of higher borrowing costs.
Firms with fewer than 50 employees have lost almost 300,000 jobs since February, data from the ADP Research Institute showed on Thursday. Some 91,000 of the losses came in May.
Some of that may have come from a competition for workers to fill the record levels of job openings seen nationwide in recent months, especially as many jump to bigger companies that can offer more competitive pay and benefits. But other data suggest that the Federal Reserve’s monetarytightening campaign may also be having an impact.
Construction and other sectors that tend to be more sensitive to changes in interest rates saw
more job-cut announcements in May than in the previous four months combined, Challenger, Gray & Christmas, Inc. — an outplacement
and business-coaching firm — reported Thursday.
Two-thirds of job losses since February have been at firms with fewer than 20 employees, according to ADP. That category has also seen the longest streak of monthly declines in payrolls since before the onset of COVID-19. More broadly, U.S. companies of all sizes in May added the fewest jobs since the pandemic recovery began.
“The job growth rate of hiring has tempered across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late,” said Nela Richardson, ADP’s chief economist.
ADP data showed that construction jobs contracted in May for the first time in 15 months. That’s amid evidence that higher mortgage rates are beginning to impact the housing market. Both housing starts and permits fell in April, according to the Census Bureau.