Tags: Small | Businesses | Cut | Jobs | Four-Month | Gain

Small Businesses Cut Jobs in June After Four-Month Gain

Wednesday, 06 Jul 2011 02:35 PM

U.S. small business owners cut jobs in June, breaking a four-month streak of growth as employment was dragged down by cutbacks at construction firms, a survey released on Wednesday showed.

The National Federation of Independent Business poll found the average number of net new jobs declined by 0.23 per firm in June, after a slim 0.01 rise in May.

The poor showing may temper already low expectations for Friday's U.S. employment report. Economists polled by Reuters expect the report to show U.S. payrolls grew by a paltry 90,000 last month, not nearly enough to lower the 9.1 percent unemployment rate.

The NFIB survey of 766 firms found that, seasonally adjusted, 9 percent of owners added an average of 2.8 workers per firm. But that was more than offset by the 16 percent who said they reduced employment by an average of 3 workers per firm.

Cuts were particularly deep among construction and financial services firms.

NFIB said construction companies make up a disproportionately large 20 percent of the survey sample, which could have skewed the results. However, even after eliminating all construction firms, the poll produced a net job decline of 0.03 workers per firm.

"It just wasn't a good job creation month," NFIB economist William Dunkelberg said in a statement.

Dunkelberg tied the weak hiring to low housing starts activity and lackluster spending on services, both sectors in which small businesses play a big role.

There was one glimpse of optimism tucked inside the otherwise gloomy report: a net 3 percent of small-business owners said they planned to create new jobs over the next three months, up 4 percentage points from May's reading.

"So, going forward, the job picture is a bit brighter than June's actual dismal performance," Dunkelberg said.

© 2017 Thomson/Reuters. All rights reserved.

   
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U.S. small business owners cut jobs in June, breaking a four-month streak of growth as employment was dragged down by cutbacks at construction firms, a survey released on Wednesday showed.The National Federation of Independent Business poll found the average number of net...
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Wednesday, 06 Jul 2011 02:35 PM
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