Orange County Register

The average number of workers at U.S. small businesses declined by 1.26 people over the past three months, the largest drop in the 30-year history of economic surveys by the National Federation of Independent Business, the nation’s largest small-business advocacy group.

That trend throughout 2009 illustrates how difficult it will be for the economy to generate jobs even if the recession ends. Small businesses employ more than half the U.S. nongovernment workers and typically account for 60% to 70% of net new jobs.

NFIB’s chart shows the dramatic drop in per-business jobs this year (Click on image for a larger view.)

Source: NFIB

“Seasonally adjusted, there was a decline in average employment per firm of 1.26 workers reported during the last three months among small-business owners in May, the largest decline in jobs in survey history for a three-month period,” said NFIB Chief Economist William Dunkelberg. “3% of the owners increased employment by an average of 2.5 workers per firm, but 27% reduced employment an average of 5.7 workers per firm.”

Most owners aren’t planning to add jobs any time soon:

Source: NFIB

“It appears that owners are not through with their labor-based cost cutting, but it is slowing,” Dunkelberg said.

That coincides with the latest employment report by the Bureau of Labor Statistics. U.S. employers reported 345,000 fewer jobs in May than in April, but that was lower than the 652,000 job loss in March and 504,000 in April.

Dunkelberg added, “Not seasonally adjusted, job creation plans (by small-business owners) were positive in all industry groups except the professional services, retail trades and manufacturing which remained weak due to the inventory run-off and the auto industry debacle.”

The NFIB surveyed 814 small-business owners in late May.

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• Surprise slowdown in May U.S. job losses
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• Pay cuts/freezes double this year
• Sprouts hiring in Orange June 5-6
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• April O.C. bankruptcy filings jump 46%
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• Federal paid sick leave bill introduced
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