This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Natural Disasters Stifle Small-Business Hiring

MOUNTAIN VIEW, CALIF. ( TheStreet) -- Businesses with fewer than 20 employees added 45,000 jobs in May, flat as compared with new figures for the prior month, and the likely result of high gas prices and natural disasters, according to Intuit's (INTU - Get Report) Small Business Employment Index.

Small businesses added 45,000 jobs from April 24 through May 23 -- fewer jobs than original estimated for April. Small-business employees also worked fewer hours last month and compensation dipped somewhat, according to Intuit.

Intuit says small-business hiring was flat from last month, and even those with jobs worked and earned less.

The data are based on approximately 64,000 small businesses using Intuit Online Payroll software. The May jobs data mean that approximately 865,000 jobs were created by small businesses since October 2009.

Intuit also revised the April employment growth rate for small businesses down to 45,000 jobs, or 0.2%, from 60,000, or 0.36% percent.

"The rate of small-business job growth is the same as April's," according to a statement by Susan Woodward, the economist who worked with Intuit to create the index, "but because compensation and hours dropped slightly, we can say the market for small-business employment is a bit softer than last month. However, in light of recent tumult in Japan, Greece and right here at home, it's a comfort that small-business employment continues to improve at all."

>> Small-Business Hiring Improves In April

Hourly employees working for small businesses put in an average of 107.9 hours in May, equating to a 24.9-hour workweek. Small-business employees worked an average of 108.1 hours in April, down from 109.8 hours, according to the revised figures.

"As small-business employers react to economic pressures driven by such factors as rising gas prices and natural disasters, we see the job market soften," Woodward says. "Employers cut back on employee hours when they have less work for people to do."

Small-business employees took home average monthly pay of $2,624 in May, 0.14% lower than revised April average monthly pay of $2,628. May wages equate to about $31,500 per year, which is part-time work for many small-business employees, Intuit says.

About 65% of small-business employees are hourly. Just 27% worked more than 140 hours for the month in April.

"With small businesses assigning fewer hours to employees, average monthly pay declines too," Woodward says. "Again, we see small businesses absorbing the shock of major events like natural disasters."

The index also showed that small-business employment in the "East South Central" part of the U.S. declined 0.1% in May, likely from severe flooding along the Mississippi River. The region was the only part of the U.S. showing small-business job losses, according to Intuit, while eemployment in the "Mountain" region of the U.S. rose 0.9% in May, the highest percent change in employment of all nine regions.

The monthly ADP (ADP - Get Report) National Employment Report measuring changes in the private sector will be released Wednesday.

-- Written by Laurie Kulikowski in New York.

To follow Laurie Kulikowski on Twitter, go to: http://twitter.com/#!/LKulikowski

To submit a news tip, send an email to: tips@thestreet.com.

RELATED STORIES:



Follow TheStreet.com on Twitter and become a fan on Facebook.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
ADP $86.06 0.17%
INTU $105.04 -0.14%
AAPL $131.70 -0.26%
FB $80.36 -0.24%
GOOG $539.46 -0.06%

Markets

DOW 18,121.49 -41.50 -0.23%
S&P 500 2,120.22 -3.26 -0.15%
NASDAQ 5,096.4520 -10.1410 -0.20%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs