Even as the overall economy managed to add jobs in July, small businesses continued cutting employees, numbers from the National Federation of Independent Businesses show.
Friday's jobs numbers revealed that the U.S. economy added 163,000 jobs last month, with a slight rise in unemployment.
The NFIB surveyed 1,803 small businesses and found a slight drop of -.04 percent in employment per firm in the prior three months through July.
That's an improvement over the 0.11 percent employment drop measured in June, but marks the second month of decline in small business employment after six straight months of improvements from December to May -- improvements that signaled the economy might have been turning around.
In perhaps another bad sign for future employment, 48 percent of small business owners surveyed said they had tried to hire in the last three months, but 86 percent of them found that few or no applicants were qualified for the positions.
Still, there was a barely silver lining in the NFIB report. A net 5 percent of small businesses plan to create jobs, up from 3 percent in the prior month. NFIB also noted that the net percentage of owners planning to create new jobs was positive in all industry groups except agriculture and retailing.
Hiring plans also differ region to region: Businesses in the mid-Atlantic and mountain states plan to cut back on workers, while businesses in the south Atlantic and central states plan to add employees as the year goes on.
The negative trends for small businesses are indicative of an economy that grew a disappointing 1.5 percent in the second quarter, a figure attributed to fewer business investments, declines in exports and widespread cuts in government spending.