NFIB’s latest jobs report indicates that the labor market for small businesses showed signs of weakening in May. According to the report, 34% of small business owners reported unfilled job openings, a figure unchanged from April and the lowest since January 2021.
Chief Economist Bill Dunkelberg commented on the findings: “Amid uncertainty, small business owners’ hiring plans remain subdued in May.” He also noted a decrease in compensation pressures, providing relief for many owners.
State-specific data is not available; however, NFIB State Director Michael Smith remarked on the challenges faced by small business owners: “This tight labor market is only adding to small business owners’ frustrations. Our members are ready to hire, but many of them say they just can’t find the right people.”
The report highlights that 55% of small business owners were hiring or attempting to hire in May, which is a slight decrease from April. Of those hiring or trying to hire, 48% reported few or no qualified applicants. Specifically, 29% noted few qualified candidates and 19% found none at all.
Job openings remained prevalent across sectors such as construction, transportation, and manufacturing but were less common in wholesale and professional services industries. The number of job openings has decreased across all industries except wholesale compared to last year.
Looking ahead, a net 12% of business owners plan to create new jobs within three months—a slight drop from April’s figures. Concerns about labor quality as an operating problem have decreased slightly to 16%, while labor costs rose marginally as a primary concern for 9% of business owners.
In terms of compensation trends, there was a notable reduction with only a net 26% reporting raised wages in May—a significant drop from April’s numbers and the lowest since February 2021. This represents the most considerable monthly decline since April 2020. However, looking forward, a net 20% plan to increase compensation over the next three months.
For further details on these findings, readers are encouraged to access the full NFIB Jobs Report online.
