Small businesses cut jobs, but outlook is mixed

Payroll processor ADP reported this morning that by its count, 32,000 jobs were lost in the economy last month. But for small businesses that number was a lot bigger — 120,000 jobs lost at businesses with less than 50 employees. 

Anna Hammond, CEO of Matriark foods, employs four people. They take surplus crops and byproducts and turn them into finished food like pasta sauce, and even meal kits for emergencies. 

“Things are OK actually,” Hammond said.

She’s even considering adding more employees. Tariffs haven’t been an issue for Matriark and they’ve mostly dodged inflation.

“All of the vegetables are U.S.-grown,” Hammond said. “Because we work with byproducts and surplus, our costs are less.”

But Hammond can sense a change in buyers.

“People are being much, much, much more careful with the dollars that they’re spending,” Hammond said.

Still, for now Hammond is optimistic, as are many small business owners according to surveys by the U.S. Chamber of Commerce.

“The small business economy is holding steady,” said Tom Sullivan, senior vice president for small business policy at the Chamber. “Confidence in their businesses and their ability to succeed continues to be heightened.”

But here too it’s a mixed bag.

“We are seeing a decrease in plans to reinvest in business, and that scares us, quite frankly,” Sullivan said.

The National Federation of Independent Business Research Center also surveys small businesses, and it also found a mixed bag. Service businesses, for example, have slowed down on hiring people, but construction can’t find enough people. 

“Which, in combination means you’re not looking at a lot of job growth,” said Holly Wade, executive director at the Research Center.

But so often, in business as in life, what people say they feel is different from what they do. A company called Homebase runs payroll for 150,000 small businesses and has real-time data on what they’re actually doing around hiring.

“From our vantage point, small businesses are absolutely pulling back on hiring and hours worked in a way we haven’t seen the last three years,” said John Waldmann, CEO of Homebase. “Small businesses are leading indicators of what our medium and larger business is going to do later.”

He said a lot is going to hinge on how well this holiday shopping season goes.