Small businesses in the country are showing signs that economic recovery is gaining some momentum, according to the latest figures from a national jobs index that tracks small companies.
The CBIZ Small Business Employment Index takes a monthly look at the hiring practices of companies throughout the country with less than 300 employees. In March, the latest figures available, the index reported a 1.66 percent increase. That’s the biggest jump from one month to another in 10 months.
“I think it’s an extremely positive sign, economically,” according to Philip Noftsinger of CBIZ Payroll Services.
When analyzing gains in hiring among companies in the U.S., it’s always possible that increases in larger companies can be related to overseas divisions. The figures for small companies are much more positive because those numbers strongly suggest that demand for workers is on the rise within the country.
In fact, Noftsinger said a healthy economic recovery absolutely depends on the increased hiring from small businesses. More people working is a logical first step to increased consumer spending.
“What’s really going to be important for a domestic recovery is those small businesses,” he told msnbc.msn.com. “What really will drive a positive movement in the economy is getting that small business employment back up and getting cash in the hands of consumers.”
The ultimate direction of the economy is still not certain, Noftsinger said, pointing out that a hoped-for recovery in the labor market last year quickly fizzled.
He said the future of gasoline prices is crucial. However, Noftsinger said he is reasonably confident that the current jobs market will continue to move slowly upward. The CBIZ Index indicates that 1 out of 4 small businesses are hiring, most often in the area of sales.
That means owners of small companies are increasingly becoming prepared for more gains in the national economy.
“They’re seeing some greening in the economy and they want to take advantage of that,” Noftsinger said.