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Revenue Gains Lead To More Jobs In Small Businesses
Written by Tim Morral
The economy has consistently created jobs the past six months for the first time since 1997, which is great news for small businesses as revenue continues to rise.
July added over 209,000 jobs, outside of the farm sector, to the U.S. economy. This is down from a 298,000 gain in June, but marks the sixth straight month that the U.S. economy has generated more than 200,000 jobs, according to the Labor Department.
The momentum is expected to continue throughout the duration of the summer months. This period of job creation (since the beginning of 2014) has outpaced 2013 by 19 percent and a weekly report that tracks how many people applied for unemployment benefits has hit a 14-year low.
"The labor market came off its hard boil in July, but it continued to simmer," Scott Anderson, chief economist at Bank of the West in San Francisco, told MarketWatch.
Small businesses have added jobs at a slower pace than larger businesses, primarily to minimize risk. According to an American Express survey, 76 percent of owners intend to hire only when their revenues increase.
However, the growing numbers of new hires in small businesses is a sign of confidence that revenues will increase as the economy continues to improve and the demand for goods and services rises.
Every major sector of the economy added jobs and hiring was especially strong in the professional ranks, construction and manufacturing, which are all sectors that pay above the average national wage. The ripple effect from growth in construction and consumer spending is feeding the increase, Susan Woodward, an economist who helps software maker Intuit compile its hiring surveys told The Boston Globe.
On the flip side, the unemployment rate did rise slightly to 6.2 percent from 6.1 percent despite strong hiring numbers, according to government data . This shows that more people have entered the labor force in search of work, which is a good sign because it shows that people believe more jobs are now available to them.
The acceleration in hiring has fueled renewed optimism that the U.S. is ready to experience a more rapid phase of expansion after years of slow growth and high unemployment.
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