Sandy K. Baruah President and Chief Executive Officer at Detroit Regional Chamber | LinkedIn
Sandy K. Baruah President and Chief Executive Officer at Detroit Regional Chamber | LinkedIn
Reports of a softening labor market are seen as a positive development for small businesses that have been struggling to hire for several years. High wage expectations appear to be stabilizing, which could serve as a catalyst for Main Street employers needing more employees to expand their operations.
Overall small business employment in July increased by 0.03% compared to June. However, month-over-month sales at small businesses in June dropped by 2.9%, and transactions decreased by 1.5%. Despite these declines, business transactions rose by 4.4% compared to the previous year.
In June, spending increases were noted in insurance (due to rising premiums), amusement (attributed to summer foot traffic), and web-based content hosting (subscriptions). Conversely, spending decreases were observed in retail, accommodations, restaurants, ambulatory health care, and professional services.
According to data from the Intuit QuickBooks Small Business Index published on August 1, 2024, there is still a worker shortage on Main Street; however, expectations for higher wages have leveled off.
The National Federation of Independent Business (NFIB) July Jobs Report released on August 1, 2024, provides further insights:
- 38% of small businesses reported job openings they could not fill in July, one point higher than June and significantly above the 49-year average of 23%.
- 57% of small businesses hired or attempted to hire in July, three points lower than June. Among those hiring, 86% reported few or no qualified job applicants.
- 15% of small business owners plan to create new jobs within the next three months, maintaining the highest level for 2024.
- In July, 33% of businesses raised compensation (five points lower than June), and 18% plan on raising compensation in the next three months (four points lower than June).
- Openings for skilled workers were reported by 32% of small businesses (up one point from June), while openings for unskilled labor remained unchanged at 16%.
- Over half of the small businesses in construction (55%) have job openings they cannot fill.
For more detailed information on this data, refer to the National Federation of Independent Business (NFIB) July Jobs Report published on August 1, 2024.