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Where Jobs are Created

May 9, 2012 – 5:04 pm

The vast majority of employed people in the United States work for small businesses. This is counter intuitive to what is written or spoken about in the major media that is dominated about stories of large layoffs or factory workers going back to work. Those layoffs and returning factory workers are not the true story about our working population. It is the small businesses and their ability to grow, thus hire more workers. The entrepreneurial health in America is the backbone of our economy and it is there that we should look for in improving health in the job market.

Unfortunately, there is not a lot of data that tracks this important segment. By the very nature of small business, that moves quickly to grow or shrink its workforce, gauging the strength and durability of the segment is problematic.

One of the better gauges called the NFIB small-business index was released this week. The reading came in for April at 2 points higher than March at 94.5 led by an eleven point jump in earnings trends. It now stands at the same level as February 2011 when GDP growth stood at about 3%, much higher than it is today. In the various components of this statistic there were gains in the plans to hire more workers, gains in expectations of a better economy and improved credit availability.

When the small business person ‘feels’ better about the future it tends to make that future come true. Though this is only one of many statistics that need to be moving in the same direction it is a good fundamental indicator of future economy growth and more importantly job creation.

Good Trading
Steve Peasley

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