ADP data shows small businesses with 1-49 workers have been reducing workers for five months. 
The ADP Employment Report shows the economy added 143,000 private jobs in September.
Importantly, a breakdown of jobs by firm size shows small businesses have now shed jobs for five months. And for the first time this year, employers with 1-19 employees shed workers.
ADP Change in Employment by Employer Size Year-Over-Year
ADP Total Change in Employment Year-Over-Year
Total employment year-over-year is sinking fast, led by small businesses.
Total Employment by Business Size
- 1-19: 34.7 million
- 20-49: 22.9.9 million
- 50-249: 38.8 million
- 250-499: 12.3 million
- 500+: 23.9 million
- Total: 132.6million
Small businesses (49 and less) are far more important than large businesses.
The BLS monthly jobs report is Friday. The Bloomberg Econoday consensus is 132,500 in a range of 70,000 to 180,000.
The Econoday unemployment rate consensus is 4.2 percent (unchanged) in a range of 4.2 percent to 4.3 percent.
Why are small businesses important? Two thirds of net new jobs, and 44% of GDP, they make up 97% of all U.S. businesses and employ 47% of private sector workers.
Correct!
We need to take interest rates down to less than zero … and then dump 500 trillion dollars into the economy… that should fix it… Shawk and Awwww 2.0
This maybe explains why ISM employment has been off recently; a small business gets the same weight as a larger one in the diffusion index but not in the overall count.
Historical ADP data charts through 2022 are available in FRED. Downturns in employment for 1-19 and 1-49 size companies are yet another leading indicator for recessions. Large firm employment is not a leading indicator. The “total employment” data is a blend of small and large and not as useful as the small-firm data series.
I don’t know why FRED discontinued the data series after 2022.
In Praise of the Dockworkers Shutting Down Our PortsYes, the longshoreman strike could be painful. And that’s the point.
https://www.thefp.com/p/longshoremen-strike-dockworkers-daggett-labor-union
I hope they stay on strike until the election and then fire all of them.
They are hoping to get KH elected, so they are back on the job “until January”.
When they were asked If they support Harris, nobody raised their hand
Mish, do you have a ‘guess’ at the BLS revision for past reports? Sarc intended
Now include off-the-books employment. Whoops! You can’t. But you can certainly count wage increases, which are (multiples) well above the inflation target. Higher wages and a lower number of jobs does not compute. The only reason employers pay higher wages is lack of labor competition. In other words, there are plenty of jobs out there for anyone willing to take one.
The world’s economies are being run in reverse. Banks don’t lend deposits. Deposits are the result of lending/investing.
Japan’s lost decade is a prime example. Japan’s commercial banking system is notable for two reasons. (1) the BOJ insures all transaction deposits (like Shelia Bair’s Temporary Liquidity Guarantee
Program, and (2) the Japanese save more and keep substantially more of their savings impounded in their banks.
Link: “Changes in Wealth and the Velocity of Money”
https://files.stlouisfed.org/files/htdocs/publications/review/87/03/Changes_Mar1987.pdf
Definitely a recession in 2025. Short-term flows down while long-term flows up, spells stagflation. Will probably enter in 1st quarter.
Yes, I have been reading many stories of small businesses shutting down and two factors are usually the issue: labor and inflation. The two kind of go hand in hand. Workers, suffering from inflation, demand higher wages and small business owners can’t afford it.
https://www.civilbeat.org/2024/09/some-small-businesses-in-kailua-town-are-closing-as-costs-continue-to-climb/
“Before the pandemic, bars and restaurants operating at a high level might have enjoyed 10% profit margins, says Steve Haumschild, owner of Lanikai Brewing Co., which operates a brew pub in Kailua. But a shrinking workforce and general inflation have increased the costs of labor, shipping and goods, Haumschild said.”
Everyone screams about inflation but no one talks about the “shrinking labor force” except me. And just wait till 10m, 20m, 30m people walk off the job and “retire” over the next few years.
There is also the fact that many small businesses are owned by aging baby boomers. When they decide to call it quits they can sell their business if they have a buyer or simply shut it down if they can’t sell. I expect that to grow as an issue as well.
It’s also because city planners are mostly leftists who get their ideas from the Bay Area: they replace streets with bike lanes and reduce the width of streets, ostensibly to slow traffic and incent people to take public transportation. Then, when there’s nowhere left to park, they wonder why all the businesses close. They also put homeless shelters in formerly hip retail areas and refuse to hire enough cops, so those areas are beset by criminals and crazy people. They’re so open-minded their brains fell out.
Have you patented that last line? Can I steal that lol??
L.A. wants to turn downtown Hollywood Blvd. into a 2 lane street, as part of a beautification project. Burbank is planning to turn the main thoroughfare of Olive Ave. to 2 lanes, creating dedicated bus lanes. Currently, not that much bus traffic.
The 500+ human resources prepared layoff packages.
Small businesses 1-29 are shedding 13K workers after adding 141K since Jan 2024 :
15K+21K+30K+39K+….
I keep reading this over and over, but the importance factor is a “code word.”
“Small businesses (49 and less) are far more important than large businesses.”
Mish, let’s agree that for the intent of the NARRATIVES, which are all false Paradigms meant for NEWS SPEAK CONSUMPTION and the BULLSHIT surrounding interest rate changes, is to keep the populace “dumbed down” and CNBC types (talking heads) straight ON THE HYPE which helps with the “dumb-ing.”
BIG BUSINESS IS FAR MORE IMPORTANT when we realize that the GOAL of GOVERNMENT is to create vast monopolies.
IF SMALL BUSINESS HAD BEEN IMPORTANT, the COVID LOCK-DOWNS would not have happened. OH, NO, it is the contrary.
They want us to “HAVING NOTHING and be HAPPY!”
Mika on Microsoft/NBC did say that that is their job to tell us what to think and a Wall Street Journal member said recently that the MSM used to be the gate keepers of the so-called facts. The FED has a game of sending out their talking heads to weave narratives. In 2014, FED Bullard goosed the stock market by saying that QE shouldn’t end, then months later saying he was misunderstood, as Japan took over pumping QE, as U.S. QE ended. The public was gamed.
We should leave it to the “experts”. They definitely expertly guided the economy and finance. Let the MSM praise their glory.
They need to lay off workers because they are too expensive. A third of them are making over $200K/yr. when you factor in the value of benefits like ‘free parking’, ‘free uniforms’ and ‘crazy hat Fridays’.
Mom and Pop business owners are squeezed. BIG BUSINESS can carefully measure output. I owned a huge business and we had bean counters making sure WE made money no matter WHAT it did to the Factory workers. I hate to admit that, but I have grown a lot since that time (40 years ago PLUS). Yes, on the backs of my employees, I retired early (38) and moved on and THEN I got a conscience, far too late to help them.
All the employees were there because it was their best deal. When they found a better deal they left. If they couldn’t find a better deal they stayed. No reason to feel bad or remorse.
In a few years the tables will be turned and it will be very difficult for you to find a doctor, repair man/woman, or other services. Be extra nice to people or they will tell you to pound sand and you’ll get no soup for you.
Given the recent hurricane sweeping in and wiping out a great deal of small to mid sized towns and the surrounding businesses, I’d expect a rise in UE shortly. It will be interesting to see the actual increase, especially if it can be tracked by region / state to see just how many jobs got wiped out.
Sad thing is, a lot of those businesses aren’t coming back or if they do, it will be months, possibly a year or more before they re-staff.
It has certainly taking away the ‘leaf peeping’ tourism the region depends on and may greatly reduce any ski season for them as well reducing the seasonal aspects of employment.
I’m sure the BLS numbers will remain strong though. Depending on the election maybe even another four years.
Good thing we saved all that money doing nothing about climate change.
ski season? Does it snow down south now?
Missing here is which industries are laying off. High-tech/startups layoffs have been rising while hiring is occurring in industrials and energy sectors. It is crucial to see these details before a broad assessment.