September 2024
Small Business Checkpoint: A labor market balancing act
Hiring demand is slowing modestly, but payroll growth remains positive with two areas of notable strength: services and the South.
Key takeaways
- There is an emerging divergence in confidence among small and large businesses – and the split is most notable on the hiring front. Establishments with less than 250 employees have slowed hiring since the beginning of this year, a sign that these business owners may be less optimistic about the economy.
- Yet while Bank of America small business payments to hiring firms, a leading indicator for payrolls, declined in the first quarter of this year, our latest update suggests their hiring is not deteriorating significantly further in the second half of the year.
- In our view, this points to a labor market in balance rather than in decline. Even as small business payroll growth is easing toward pre-pandemic levels, two key areas of strength have emerged: hiring in the services sector and the South.
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.
