June 16, 2024

Small Businesses Show Surprising Resilience in the Face of High Interest Rates, Hiring Remains Strong

2 min read
Struggles in hiring for small businesses appear to be improving

Despite high interest rates, the U.S. economy has shown unexpected strength in the current environment, with small businesses steadily expanding their workforces in February. The CBIZ Small Business Employment Index monitors hiring among thousands of businesses with 300 or fewer employees nationwide and showed that 20% of companies increased their staff, 60% maintained their headcounts, and 20% reduced staff.

According to Anna Rathbun, the Chief Investment Officer of CBIZ, small businesses have been able to sustain this strength despite challenges like the inability to offer competitive salaries and benefits like health insurance. Certain industries saw more hiring activity than others, with sectors like administrative and support services, arts and entertainment, and technology and life sciences experiencing hiring gains. On the other hand, industries like accommodation and food services, insurance, and utilities witnessed decreases in employment.

In terms of regional hiring patterns, the West, Southeast, and Central regions saw slight increases while the Northeast region saw a slight decline. The positive trend in small business hiring aligns with the overall job growth in the U.S., with employers adding 275,000 jobs in February, surpassing expectations and displaying the economy’s resilience in the face of high-interest rates. This marked an increase from the previous month when employers added 229,000 jobs.

Despite challenges such as competition for talent and rising wages costs for small businesses continue to thrive due to their adaptability to changing economic conditions.

In conclusion,

The CBIZ Small Business Employment Index indicated a 0.17% increase in hiring among small businesses in February. Despite high interest rates,

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