Small businesses are still adding jobs. That’s the good news. The rest of the employment news this week is not so good so far. Unfortunately, the stock market doesn’t pay as close attention to the small business sector and chooses to react to headline news, as it did this week when private payroll company ADP reported its monthly employment figures.
First, the good news: the bright spot in the report came from small businesses, where jobs increased by 27,000 (medium-sized businesses added 30,000 jobs).
You could, if you run a service-oriented small firm, take comfort in the fact that the services sector grew by 48,000 last month, which is the 17th consecutive monthly increase in the field. So even if the overall report indicates slower hiring trends in general, there is still optimism in some areas.
The big report is Friday, when the Labor Department's May jobs report is scheduled to be released. Let’s hope it is not similar to ADP’s figures, which indicated that nonfarm employment increased by only 38,000 jobs, from the 175,000 expected by analysts.
The ADP survey, which is seen by many economists as an indicator for the Labor Department's figures, takes into account only private sector jobs, while the Labor Department also tallies government workers. However, state and local governments have been laying off workers over the past few months due to budget decreases, according to The Wall Street Journal.
While the report was disappointing, economists overall still expect the national unemployment rate to dip below 9 percent to 8.9 percent for May. So, once again, hold tight to the positive news this week.