No 'Barn Burner' for Job Growth: Surveys
Uncertainty surrounding the economy, combined with a lack of qualified workers and improved efficiencies with current operations are among the reasons cited in two separate surveys as reasons why job growth in the U.S. has stalled.
Two surveys released ahead of the government’s April employment report go a long way in explaining why just 115,000 jobs were added to the payroll in April, a disappointing number that was below the projected 170,000.
While the unemployment rate dipped to 8.1 percent in April from 8.2 percent in March, the hoped-for boost in job creation is not materializing, especially in the small business arena.
A survey by the National Federation of Independent Business showed the slightest of increases in hiring in April among its membership. Its survey showed a net increase of 0.1 employee per firm, and 74 percent of the 1,817 respondents said they had not hired at all in the past three months.
Business owners reporting that they could not find qualified applicants hit 34 percent. Still, according to the NFIB, the hard-to-fill jobs openings improved, rising two percentage points to 17 percent. Hard-to-fill openings are a strong predictor of the unemployment rate, according to a statement from the NFIB, and the rise in openings is “a welcome development.”
“The ability to find qualified applicants for available jobs continues to be a problem for many small business owners,” said the NFIB in a statement. “While firms have eased layoffs, they haven’t resumed strong hiring.”
A weak economic recovery has put the brakes on hiring, according to Sageworks, a financial information company. It asked 451 financial professionals why private companies were not ramping up hiring. Nearly 32 percent said their clients are not hiring because they are concerned about the economy in general, while another 22 percent say they are more risk averse since the last recession .
And others have learned how to be more efficient: 23 percent said their clients improved operations to the point where they had reduced the need to hire additional people.
“The whole idea of job creation is really about how business owners feel about their sales numbers,” said Brian Hamilton, CEO of Sageworks. “They’re asking, ‘How are my sales? How are my profits right now? And about 12 months from now or 24 months from now, how do I think I’ll be doing? Right now, there’s this general anxiety as to what’s going to happen in the future.”
The NFIB is also guarded in its predictions for job growth, although somewhat more optimistic. “The April NFIB survey anticipates some strength in the job creation number with little change in the unemployment rate,” it said in a statement. “With job creation plans rebounding, the outlook is a bit more optimistic for the second quarter, but no 'barn burner' for job growth.”