While the unemployment rate has shown little movement since August 2015, small business hiring trends suggest the unemployment rate is remaining steady at what some may call “full employment.”
Total nonfarm payroll employment rose by 161,000 in October and the unemployment rate was little changed at 4.9 percent, according to the U.S. Bureau of Labor Statistics.
The number of unemployed persons was little changed at 7.8 million in October. Both this measure and the unemployment rate have shown little movement, on net, since August 2015.
The number of persons employed part time for economic reasons was unchanged at 5.9 million.
In October, 1.7 million persons were marginally attached to the labor force, down by 216,000 from the previous year. Among the marginally attached, there were 487,000 discouraged workers in October, down by 178,000 from October 2015.
NFIB small business optimism
The NFIB Small Business Optimism Index ticked up 0.8 points to 94.9. Five of the 10 components posted a gain, three declined and two remained unchanged in October. Nearly half of the respondents cited taxes and red tape as their “Single Most Important Business Problem.”
Fifty-five percent of small business owners reported hiring or trying to hire, down 3 points, but 48 percent reported few or no qualified applicants for the positions they were trying to fill. Twenty-eight percent of all owners reported job openings they could not fill in the current period, up 4 points.
This indicates that labor markets remain right and the unemployment rate will remain steady at what many call “full employment,” according to the National Federation of Independent Business (NFIB). A seasonally adjusted net 10 percent plan to create new jobs, unchanged from September. Job creation plans were strongest in manufacturing and professional services.
Owners who expect better business conditions in the next six months fell 7 points, which means now more owners expect that conditions will worsen. Only 9 percent of small business owners think now is a good time to expand, up two points. Among owners who said now is a bad time to expand, the political climate was the second most frequently cited reason.
“Small business owners need predictability. What we’re seeing in our data is that the political climate creates the opposite,” said NFIB Chief Economist Bill Dunkelberg. “Government actions affect basic business decisions, and owners are unwilling to take risks, make investments, or hire new employees as long as politicians and regulators keep them guessing about the future.”
On the last business day of September, there were 5.5 million job openings, little changed from August, and the job openings rate was 3.7 percent.
The number of hires dropped by 187,000 to 5.1 million in September and the hires rate was 3.5 percent.
There were 4.9 million total separations in September, little changed from August, and the separations rate was 3.4 percent. Among separations, the number of quits was little changed at 3.1 million and the quits rate was 2.1 percent.