Small Business Checkpoint: Signs of a normalizing labor market

After a surge in employment growth in 2023, our data suggests small business hiring has come off its peak.

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Taylor Bowley

March 2024

Key takeaways

  • Small business hiring has recently surpassed overall job growth. We largely attribute this strength to small businesses playing catch up during 1H 2023, with hiring now rotating back to more "normal" levels. Bank of America payroll payments per small business client supports this view, as growth has started to moderate from peak levels.
  • Notably, service industries like lodging and healthcare have seen consistently strong payroll growth over the past year. Yet, when we refresh our alternative hiring analysis, small business payments to hiring firms have been declining since December, a sign in our view of an overall easing labor market.
  • One reason why small business hiring may have tempered lately is because it has become easier to find qualified workers. Looking more broadly, total payments per small business client increased 2.0% year-over-year (YoY) in February.

Read our full analysis for a more in-depth look at these trends.

Small Business Checkpoint is a regular publication from Bank of America Institute. It aims to provide a real-time assessment of small business spending activities and financial well-being, leveraging the depth and breadth of Bank of America’s proprietary data. Such data is not intended to be reflective or indicative of, and should not be relied upon as, the results of operations, financial condition or performance of Bank of America.