Small Businesses keep laying off, Large businesses have slowed down layoffs

Challenger reported that layoff announcements fell to 34,768 in August from 41,676 in July. Layoff announcements in August 2010 were 54.5% below August 2009’s level (the data are not seasonally adjusted).
 
ADP employment fell 10,000 in August, weaker than expected and the first decline since January. July ADP employment saw a slight downward revision to 37,000 from an initially reported 42,000.
 
Service-producing employment rose 30,000 in August, while employment in the goods-producing sector dropped 40,000 with manufacturing employment down 6,000 and construction employment down 33,000. Financial services jobs fell 5,000 in August.
 
BOTTOM LINE

Layoff announcements remained very low in August and in the first eight months of 2010 have totaled 374,121, a 65.1% decline from the first eight months of 2009. The disparity between low layoff announcements and weak ADP employment likely reflects divergent conditions for large and small businesses (since job cut announcements mainly capture large business layoffs and ADP employment is probably more heavily influenced by small business hiring). We continue to look for a slowing in private payrolls to 25,000 in August and we see total nonfarm payrolls down 100,000 in the month.

What this means is that small businessess are not hiring, and big businesses have slowed down on the layoffs.  Given that small businesses created the majority of jobs in the United States, this data cannot be seen as positive. 

Some more information about small business from the SBA. 

Small firms:
  • Represent 99.7 percent of all employer firms.
  • Employ just over half of all private sector employees.
  • Pay 44 percent of total U.S. private payroll.
  • Have generated 64 percent of net new jobs over the past 15 years.
  • Create more than half of the nonfarm private gross domestic product (GDP).
  • Hire 40 percent of high tech workers (such as scientists, engineers, and computer programmers).
  • Are 52 percent home-based and 2 percent franchises.
  • Made up 97.3 percent of all identified exporters and produced 30.2 percent of the known export value in FY 2007.
  • Produce 13 times more patents per employee than large patenting firms; these patents are twice as likely as large firm patents to be among the one percent most cited.

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