Small Business Hiring Surges Despite High-Interest Rates: CBIZ Report

Struggles in hiring for small businesses appear to be improving

Small businesses across the nation have shown a positive trend in hiring, according to the CBIZ Small Business Employment Index. Despite high interest rates, the U.S. economy remains strong and small businesses have been able to sustain this strength while steadily expanding their workforces. The index monitors hiring among thousands of businesses with 300 or fewer employees nationwide.

According to Anna Rathbun, Chief Investment Officer of CBIZ, the U.S. economy has shown unexpected strength in the current high-interest rate environment. This is particularly evident in small businesses which have been able to sustain their growth and expand despite challenges such as high interest rates and competition for talent.

The CBIZ index showed that 20% of companies increased their staff, 60% maintained their headcounts, and 20% reduced staff in February. Certain industries saw more hiring activity than others with sectors like administrative and support services, arts and entertainment, and technology and life sciences experiencing hiring gains while industries like accommodation and food services, insurance, and utilities witnessed decreases in employment.

In terms of regional hiring patterns, the West, Southeast, and Central regions saw slight increases while the Northeast region saw a slight decline in February. The positive trend in small business hiring aligns with the overall job growth in the U.S., as evidenced by employers adding 275,000 jobs in February which surpassed expectations despite high-interest rates. This marked an increase from the previous month which saw the addition of 229,000 jobs

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