While small business job growth has slowed, it’s still growth, and that may be cause for optimism, according to new analysis from ADP.
The payroll provider released its data Thursday (June 1) that found small businesses adde 83,000 jobs in May, concluded that the figure signals opportunity for SMBs to take a risk for new growth. But in addition to the figure, ADP released revised data for March and April, reporting lower job gains in both months than the company had previously estimated.
Overall, businesses added about 253,000 jobs in May, which signals the second month in a row of strong hiring data in the U.S.
“Job growth is rip-roaring,” said Moody’s analytics chief economist Mark Zandi in an interview with USA Today, an optimistic statement despite ADP’s downgraded job calculations for March and April. “Increasingly, businesses’ number one challenge will be a shortage of labor.”
The positive outlook is in contrast to analysis released early this week from Paychex, which concluded that job growth is slowing among SMEs in the U.S.
“The increased pace of small business employment growth that we saw following the election of President Trump has slowed,” reflected Paychex President and CEO Martin Mucci in a statement. “Small business owners now seem to be taking a more wait-and-see approach to hiring.”
According to Paychex data, the pace of small business job growth in May was 0.25 percent lower than in was a year ago.
But ADP and Moody’s, which helps ADP compile the report, seem to think that small businesses are more confident about their financial positions and thus hiring more. According to ADP’s report, small businesses added an average of 90,000 new employees a month since January, nearly double the additions seen in the last six months of 2016, reports said.