The U.S. economy added 236k jobs in February and the unemployment rate fell to 7.7 per cent.
As slow as hiring has been, small businesses have been hiring far less than the big corporations.
From TD Securities’ Millan Mulraine:
labour market underperformance: The small business sector has generally been a key source of employment growth in the US economy, accounting for close to 55% of all the private sector jobs created between mid-2003 and the beginning of the last recession. Its overall contributions has fallen dramatically in recent years, accounting for a miserly 33% of the jobs created since the economic rebound. This disappointing performance has been reflected in the massive divergence between the plans to hire sub-component of the NFIB and its composite employment counterpart.
Mulraine writes that part of the problem is limited access to credit.
“Indeed, while overall credit conditions have been on the mend, access to credit has generally been identified as a sour point for small business owners,” he writes. “Consequently, the proportion of businesses indicating a willingness to increase capital spending has held steady at around 20%, which is well below the 30% average prior to the recession, suggesting that credit access has remained a binding constraint for both hiring and capital spending decisions.”
Photo: TD Securities, EcoWin
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