The measurement that tracks small business hiring recorded an increase in March that was the highest since June of 2010, www.msnbc.msn.com reported.
The CBIZ Small Business Employment Index follows the hiring at companies that have 300 or fewer employees. The March increase was 1.66 percent.
“I think it’s an extremely positive sign, economically” said Philip Noftsinger, who is the business unit president for CBIZ Payroll Services. Employment gains at small businesses is a particularly important sign because it suggests increased demand in the U.S. economy.
More so than what happens at large companies, Noftsinger said more demand leads to additional hiring and consumer spending and that trio is crucial to spur the national economy.
“What’s really going to be important for a domestic recovery is those small businesses,” he said. “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.”
Noftsinger did add that the price of gas could be a complicating factor because small companies operate on very tight budgets and potential growth could be squashed if fuel prices continue at their current level of nearly $4 a gallon.
Noftsinger also pointed out that several good months in the labor market last year did not end up being a long-term trend. However, he said he is more hopeful that the current market is headed in the right direction. He said the CBIZ index shows companies are at least maintaining their staffing levels, while a full 25 percent are adding jobs.
Many of those positions are in sales, which is another positive signal that positive movement in the economy will continue.
“They’re seeing some greening in the economy and they want to take advantage of that,” Noftsinger said of small businesses.”