One report indicates that private sector employment growth exceeded the forecast of nearly 50,000 jobs in January 2018 and that small firms played an important role in this growth.
Economists forecast an increase of 185,000 jobs in the private sector for the first month of the new year. However, the National Employment Report of the ADP ( NASDAQ: ADP) showed a growth of nearly 50,000 private sector jobs more than expected – a total of 234 000 jobs in total. Significantly, small businesses provided 58,000.
Small Business Report for January 2018
So, what is the reason for this great performance?
The economy is running at full speed with the New York Federal Reserve increasing its estimate of US gross national product growth of 3.98% for the fourth quarter. The unemployment rate is also at its lowest level for 17 years, with the Bureau of Labor Statistics reporting that it is now at 4.1%. And the stock market has been on a tear, increasing its value by trillions of dollars. Add fewer regulations and a more tax-friendly business environment and we do not know where this economy will go.
For small businesses, the current economic climate offers new opportunities. According to reports from Biz2Credit's Small Business Loan Index for December 2017, approval rates for large banks and institutional lenders hit new highs at 25.2%.
Mark Zandi, chief economist of Moody's Analytics, said in a press release on the ADP report: "The job market is in full swing. Given the strong job growth in January, 2018 is expected to be the eighth consecutive year in which the economy will create more than two million jobs. If that is not the case, it is probably because companies can not find workers to fill all the vacancies. "
In terms of firm size, small businesses with 1 to 19 employees created 24,000 jobs and those with 20 to 49 created 33,000 jobs for a total of 58,000 jobs. Medium-sized businesses with 50 to 499 employees created 91,000 jobs and the combined number of large firms with between 500 and 1,000 employees added 85,000 jobs in total.
Service sector firms generated the largest number of jobs (212,000), followed by goods-producing industries (22,000).
The ADP National Franchise report fell short of December figures, while franchises would have created 27,300 new jobs, but the franchise industry still had a respectable number with 19,700 new jobs created in January. Restaurants provided 14,000 jobs, while auto parts and dealers reported another 5,200. Housing, business services and food retailers added 1,700, 200 and 100 jobs respectively.
<img class="aligncenter wp-image-484204" src="https://businessdigit.com/wp-content/uploads/2018/02/1517668306_511_small-businesses-add-58000-new-jobs-adp-reports.jpg" alt=" ADP National Franchise Report for January 2018 "width =" 850 "height =" 1276 "/>
Ahu Yildirmaz, vice president and co-director of the ADP Research Institute, said: "We started the year with a month of unprecedented job gains," he said. Ahmadinejad said. "Service providers were pulling on all the plans, posting their biggest gain in over a year.We also found a strong hiring from medium and large companies, while growth in the business was strong. employment in small firms slowed slightly. "