Small businesses in the United States created 45,000 new jobs in February, according to Intuit Inc.'s latest Small Business Employment Index.
The February index estimates that small-business employment grew by 0.2% between Jan. 24 and Feb. 23, equating to an annual growth rate of 2.9%.
While employment grew slowly in February, average monthly hours worked decreased by .04%, or six minutes, and average monthly compensation increased by .15%, or $4 per worker, according to Intuit, a Mountain View, Calif.-based provider of business and financial-management software such as QuickBooks and TurboTax.
"We saw another month of tepid improvement for small businesses in February, echoing pretty much all of the other indicators of economic activity," said Susan Woodward, the economist who worked with Intuit to create the Index. "As an overall trend, employment is up modestly, but the number of hours worked by hourly employees is about the same as last month, seasonally adjusted."
Woodward noted that compensation adjusted for inflation was "essentially flat," while the hiring rate dropped slightly on a seasonally adjusted basis, "and sits at about half of what it was before the recession was underway."
"The low hiring rate reflects the reluctance of employees to leave their jobs in such an unsecure job market, so employers do not need to hire to replace them," Woodward said. "This phenomenon is present in firms of all sizes, and is not unique to small firms."
The Intuit Small Business Employment Index is based on aggregate and anonymous online employment data from approximately 73,000 small-business employers, each with fewer than 20 employees. The small-business employers use Intuit Online Payroll and represent a subset of the total Intuit Online Payroll user base, the company noted.
"These smallest employers are important to the economy, as they comprise 87% of the total U.S. private-employer base and employ nearly 20 million people," Intuit said in a news release.
Intuit said it plans to recalibrate its index in the coming months and expects the numbers to be lower. The recalibration will be based on new data provided by the Bureau of Labor Statistics, which are used as inputs into the index.
