NFIB: Hiring Solid, Labor Market Tight

Washington, DC, August 6, 2007--The National Federation of Independent Business' Chief Economist William Dunkelberg commented about the labor market in response to the release of the Bureau of Labor Statistics Employment Situation report.

Dunkelberg referred to figures from the July 2007 NFIB Small Business Economic Trends Report, which will be released on August 14:

"Small-business owners managed to do some solid, but not spectacular, hiring in July," he said. " Sixteen percent reported increasing employment an average of four workers per firm, compared to 11% who reported workforce reductions averaging 2.4 workers.  For all firms, this was an average increase of 0.4 employees per firm.  Seasonally adjusted, the numbers are less impressive, with 14% increasing employment by 3.7 employees per firm, 13% reducing employment by 2.6 workers and, including all firms, a gain of 0.1 employees per firm.  In construction, 20% increased the size of their workforce an average of 4.2 workers, and 12% cut employment by an average of 3.3 workers, producing an increase for all construction firms of 0.4 workers per firm (not seasonally adjusted).

"Twenty-three percent (seasonally adjusted) reported unfilled job openings, down three points from June.  The decline in the percent of firms with unfilled openings anticipates an increase in the unemployment rate in the months to come.  Thirteen percent of the owners reported that the availability of qualified labor was their top business problem, unchanged from June.  Only taxes and the cost and availability of insurance received more votes for the number one business problem.  No one likes high energy prices, but for service sector firms, this is not likely to be a top problem.

"Over the next three months, 17% plan to create new jobs (down three points), and 10% plan workforce reductions (up three points), yielding a seasonally adjusted net 13% of owners planning to create new jobs – up a point from June.  Fifty-four percent reported hiring or trying to hire new workers, 80%reported ‘few or no qualified applicants' for their positions.

"That's a tight labor market," Dunkelberg concluded.