SBA: Small Firms Responsible for 63 Percent of Net New Jobs Between Mid-2009 and 2012

Employment growth continues to improve. Some sectors of the economy remain weak. Economic uncertainty still bothers employers.

Those are among the varied observations documented by the U.S. Small Business Administration Office of Advocacy’s Third Quarter Employment Bulletin for 2013, which breaks down its mixed economic messages into “good news,” “areas of concern” and “the unknown.”

Good News

  • There have been consistent gains since the end of the downtown in 2009. In the last year, 2.3 million net new private-sector jobs have been created, with the total approaching the 2008 peak of more than 115 million private sector jobs.
  • The unemployment rate fell nearly 3 percent since the October 2009 peak of 10 percent to the September 2013 rate of 7.2 percent.
  • Small firms with fewer than 500 employees were responsible for 63 percent of the net new jobs from mid-2009 to the end of 2012. If the trend continues this year, small businesses would be projected to have created 4 million of the 6.4 million private-sector net new jobs since the start of the recovery.
  • Construction, leisure/hospitality and the electronic wholesale trade are among the small-business-dominated industries that have led the expansion.

Areas of Concern

  • It’s harder for recent graduates and the unemployed to find jobs because the turnover rate is still so low.
  • Some parts of the economy are still weak. The publishing, broadcasting and telecommunications all had lower net employment in the third quarter.

The Unknown

The bulletin’s authors say that “uncertainty still plagues employers.” Plus, the hangover from the federal shutdown will make it difficult to reliably anticipate or interpret employment numbers and their impact on small business growth through the end of the year.

The most recent data shows that job growth among small businesses continues to be positive, but uneven.

For more information, go to sba.gov/advocacy.