Small businesses lost 75,000 jobs in January

Small businesses lost 75,000 jobs in January.

That’s according to ADP’s National Employment Report, published in partnership with the Stanford Digital Research Lab.

The negative report follows December’s update, which saw small businesses add 195,000 jobs.

At the national level, with statistics covering small, medium and large companies, the total job growth in January was 106,000.

ADP National Employment Report January 2023

Small business job losses in January

The 75,000 lost small business jobs collapse in this way, with 70,000 of those jobs lost for businesses with 1 to 19 employees and 5,000 for businesses with 20 to 49 employees.

When small businesses added 195,000 jobs in December, increases were greatest in businesses with 20-49 employees (130,000). Companies with 1-19 employees won 65,000.

Over the two-month period, small businesses added 120,000 jobs. Within two months companies with 1-19 employees created 60,000 and companies with 20-49 employees 60,000 jobs.

Average annual salary increases

The job losses could be related to changes in the median annual wage. At the national level, medium and large companies saw a 7.6/7.7% increase in median annual wages.

Small companies with 20-49 employees saw a 7% annual salary increase. But very small companies with 1-19 employees saw a 5.5% salary increase.

The national snapshot

According to ADP chief economist Nela Richardson, January job growth was weak due to extreme weather conditions, including flooding in California and winter storms in the central and eastern parts of the US.

In fact, job turnover declined regionally in the Midwest, where job losses were 40,000. Job gains were largest in the southern US (55,000), followed by gains in the Northeast (42,000) and western US (27,000).

By Industry

The largest job gains were in services, with 109,000 jobs gained, while goods and services lost 3,000 jobs.

Here’s the breakdown of gains: Leisure and hospitality led with an increase of 95,000 jobs. Job gains were also seen in financial services firms (30,000), manufacturing (23,000), education and health services (12,000), and professional and business services (8,000).

There were job losses in retail, transportation and utilities, where 41,000 jobs were lost. Jobs were also lost in construction, with 24,000 jobs lost.

By company size

As already mentioned, most of the jobs were lost in small companies.

Medium-sized companies with 50-249 employees have created 99,000 jobs, while medium-sized companies with 250-499 employees have lost 35,000 jobs.

Large companies with more than 500 employees gained 128,000 jobs.

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