U.S. Small Businesses Hiring Plans Climb to Pre-Pandemic Level

The largest share of U.S. small businesses since February say they plan to add workers in coming months, though hiring conditions remain difficult as the pandemic continues to add to uncertainty in an uneven recovery.

“The small business labor market is recovering and moving in the right direction,” William Dunkelberg, chief economist at the NFIB, said in a statement. “However, there is still uncertainty and many small businesses are counting on additional financial assistance.”

The poll offers some hope in a labor market where employment more broadly remains well below pre-crisis levels. Even so, lawmakers have been at a standstill in negotiations over legislation to provide further fiscal relief to the unemployed and small business, and the reduction in aid could restrain any job gains.

A net 18% of firms in the NFIB survey said they raised compensation in August, up 3 percentage points from a month earlier, yet well below the 36% share before the onset of Covid-19 and economic shutdowns.

The Labor Department on Friday is projected to report a 1.35 million increase in total payrolls in August and an unemployment rate of 9.8%, according to the median estimates in a Bloomberg survey of economists.