Small Businesses Aren't in the Hiring Mood
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The prospects for job growth from small businesses look gloomy, according to a Wells Fargo/Gallup Small Business Index survey:
U.S. small-business owners expect to add fewer net new jobs over the next 12 months than at any time since the depths of the 2008-2009 recession, according to this November's Wells Fargo/Gallup Small Business Index survey. Small-business owners' net hiring intentions for the next 12 months plunged to -4 in November, down from +10 in July and matching the previous record low recorded by the Wells Fargo/Small Business Index of -4 in November 2008.
The survey found that 21% expect to cut jobs while 17% expected to add jobs in the next year.
For much of 2012, the index was positive—small businesses are historically positive about hiring more workers to grow their businesses--but plunged into negative territory.
Survey research and anecdotal evidence suggests that the fiscal cliff is partly responsible for this increased pessimism.
The survey also finds that the percentage of small businesses that have reduced jobs over the last 12 months has increased.
The Bureau of Labor Statistics announced that 146,000 jobs were added in November, dropping the unemployment rate to 7.7%. The BLS numbers show that the economy is stuck in a band of tepid job creation. The average monthly job growth in 2012 has averaged 151,000, down from 153,000 per month in 2011.
The past, present, and future for small business job creation isn’t looking good.