NEW YORK (AP) — Small business hiring slowed dramatically in February, a sign that company owners may be getting cautious about the economy.
That report comes from payroll provider ADP, which said Wednesday its customers with up to 49 staffers added just 12,000 jobs last month, down sharply from 107,000 in January and 84,000 in December. Small business hiring was relatively weak compared to job growth at larger companies — ADP’s business customers of all sizes added a solid 183,000 jobs last month.
The February reading may be revised — both of the previous readings were changed, with the January figure raised sharply and December’s downwardly adjusted. Still, the erratic pace of hiring shows that small business owners are sticking to a strategy of hiring only when their revenue justifies the added expense and risk. It also reflects the slippage in owners’ optimism that has been seen in recent surveys.
With economists forecasting a slowing of the economy this year, many owners are taking a cautious stance, mindful of the devastation small companies suffered during the Great Recession. More than a decade ago, many owners hired in anticipation of getting new business; that tactic is rarer now.
Economists are predicting a roughly 1 percent annual growth rate for the economy in the first quarter, down from 2.6 percent in the fourth quarter.
The Labor Department issues its report on February hiring on Friday. While the report won’t break out job growth by company size, it will give some clues about hiring by small businesses in some industries. The construction industry, for example, includes many small businesses.