NFIB Jobs Statement: Job Creation Shows Mixed Signals

Chief economist for the National Federation of Independent Business (NFIB) William C. Dunkelberg, issued the following statement on the March job numbers, based on NFIB’s monthly economic survey that will be released on Tuesday, April 10, 2012. The survey was conducted in March and reflects the responses of 757 randomly-sampled NFIB members:

“March came in like a lion on the job-front, but went out tempered by future job growth indicators. Overall, the March survey anticipates some strength in the job creation number with little change in the unemployment rate. With job openings and plans for job creation both falling, prospects for a surge in job creation in the small business sector are still not promising.

“Building on February’s increased jobs numbers, March’s survey gives us the best readings since January and February of 2011. The net change in employment per firm (seasonally adjusted) was 0.22, double the reading for February. Seasonally adjusted, 10 percent of surveyed owners added an average of 3.1 workers per firm over the past few months, and 13 percent reduced employment an average of 2.1 workers per firm. The remaining 77 percent of owners made no net change in employment.

“Forty-four (44) percent of owners hired or tried to hire in the last three months and 32 percent reported few or no qualified applicants for positions. Many small firms are struggling to find qualified applicants for available jobs. And while firms have eased firings (initial claims for unemployment now around 360,000 per week) they haven’t resumed strong hiring.

“In search of an explanation as to why so few qualified workers exist, we turn to the NFIB poll Job Vacancies (2007), in which owners were asked about the reasons why so many applicants were judged to be unqualified. Overall, owners characterized the pool of available workers as containing few or no qualified workers. More specifically, 26 percent of small employers reported applicants typically did not have the required skills for the open position and 23 percent had a poor work history which made them less attractive; nine percent of owners reported that applicants had drug use problems and six percent reported having applicants who could not establish their legal status. Sixteen (16) percent of the owners reported that applicants typically had poor social or people skills, 20 percent had inflated wage expectations, 17 percent exhibited a poor attitude and 14 percent had a poor appearance. In comparison, only 11 percent of the owners reported that deficient English or math skills were typically a disqualifying characteristic.

“The percent of owners reporting hard to fill job openings fell 2 points to 15 percent, the second monthly decline since reaching 18 percent in January which was the highest reading since June 2008. Hard-to-fill job openings are a strong predictor of the unemployment rate and indicate that the rate is likely to rise, other things being equal. This is reinforced by the fourth month of decline in the net percent of owners planning to create new jobs. March’s net ‘0’ reading was 4 points lower than February and 7 points lower than last November. With a net ‘0’ percent planning to create new jobs, there is little reason to be optimistic about job growth. Not seasonally adjusted, 15 percent plan to increase employment at their firm, five percent plan reductions, good, but seasonally very low compared to normal levels.”

The full report is available here: www.nfib.com/jobsreport.

NFIB is the nation’s leading small business association, with offices in Washington, D.C., and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information is available online at www.NFIB.com/newsroom.