Not Yet Ready to Call It a Recovery
March ended on a positive note with a year-to-date increase in small business hiring of 3.1 percent and a year-to-date increase in pay of 0.4 percent, according to SurePayroll's Small Business Scorecard, an economic indicator that tracks the health of the U.S. small business economy using actual payroll data for tens of thousands of small businesses nationwide.
So after three months of hiring acceleration and slight month-over-month increases in wages, dare I say we see a trend?
In the very least, I think we see a nice start to 2010—a definite rebound in hiring and positive signs for paychecks. The question is do business owners see it that way? The SurePayroll small business owner optimism level—our gauge of the percentage of business owners who say they feel optimistic about the small business economy—continues to bounce around from month to month. This month, the rate stands at 55 percent, down six points from last month. That's better than January's 46 percent optimism but far from 2007's highs of nearly 80 percent.
I'm a numbers guy through and through and believe many indicators are telling us we've turned the corner. Our hiring and wage numbers suggest a steady climb up from rock bottom, and besides that the GDP was up in the fourth quarter of 2009. But I also know that the way business owners feel about the economy is the most powerful indicator out there. And with nearly half not feeling optimistic, I can't say we're in recovery mode yet.
Perhaps a few more months of positive hiring and wage growth and some more details about how small businesses will be affected by the health care bills will make the difference. Until optimism stabilizes, I'm cautiously optimistic that 2010 will hold the headline we all desire to see most: "Recovery!"
Click here to read the full SurePayroll Small Business Scorecard for March including national and regional data.
MICHAEL ALTER | Columnist | President of SurePayroll
Michael Alter is president of SurePayroll, America?s leading online payroll service. He received an MBA from the Harvard Business School and holds a bachelor's degree in economics from Northwestern University.