The CBIZ Small Business Employment Index (SBEI), which tracks hiring trends among thousands of companies with 300 or fewer employees across the U.S., indicated a seasonally adjusted increase of 2.69% in May. Small businesses experienced robust growth in the preparation for the upcoming vacation season, with experiential industries leading the labor market surge to cater to summer activity demands.

In May, 25% of companies in the index increased staffing, 60% made no change to their headcounts and 15% reduced employment totals. Accommodation and Food Services, Administrative and Support Services, and Information sectors saw increases in hiring. However, the Financial Services and Government experienced slower hiring rates, while Wholesale Distribution observed a decline in hiring.

There were hiring increases seen across all regions in the U.S. in May. The Northeast (4.50%) had the largest employment gain, followed by the Central (2.72%), Southeast (1.52%) and West (0.90%) regions. Despite indications of softening economic growth, May demonstrated robust hiring gains for small businesses. Experiential businesses led the labor market to meet the demands for summer activities, and the tight labor market conditions kept full staffing a priority for many businesses. 

Anna Rathbun is Chief Investment Officer, CBIZ Inc.

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