Small-biz hiring improves, confidence falls

Some sectors of the economy continue to hire, despite a stubbornly inflated unemployment rate in Charlotte and beyond. In the Charlotte metropolitan region, for instance, leisure and hospitality, professional and business services and financial activities were among the fields to add jobs in June, state data show.

Small businesses, too, remain an important driver of economic growth - though a pair of new reports paint conflicting pictures of just how much the small-business job market is improving.

Payroll services company SurePayroll found in its July Small Business Scorecard that small-business hiring climbed 2.6 percent in the Charlotte area. That's better than peers such as Atlanta and Raleigh-Durham.

But wages in the region fell 2 percent. And across the U.S., both hiring and paychecks slipped in July, the report found. Meanwhile, optimism among small-business owners plummeted to 47 percent this month from 67 percent in June, SurePayroll found.

"The economy is in reverse," company CEO Michael Alter said, adding that the turmoil surrounding the debt-ceiling debate played a role.

Conditions at the nation's smallest businesses, though, are a little brighter, according to Intuit Inc.'s latest Small Business Employment Index.

That report, based on a poll of companies with fewer than 20 employees, found small-business employment in the U.S. climbed 0.2 percent in July, or at an annualized rate of 2.9 percent. Hiring in North Carolina grew 0.4 percent.

Small firms across the country have created nearly 715,000 new jobs since October 2009 and 50,000 in July alone, Intuit found. In addition, pay and hours worked climbed in July, too, suggesting there's finally more competition for talented workers.

That "modest yet steady growth" in hiring, pay and hours could mean business conditions are improving, said Susan Woodward, the economist who worked with Intuit to create the index.

"July's small-business data cheers me up," she said.

That's good news for the Charlotte area, where many private firms seem to be rebounding. But the government sector continues to slash jobs, and with an unemployment rate of 11.2 percent in June, the region still has a long road back to full employment.

Will debt deal ease uncertainty?

As politicians work to finalize a debt ceiling deal, many hope the compromise will wipe out some of the uncertainty still plaguing the U.S. economy.

It's unclear how much of a boost that will generate. But one recent report, at least, suggests the federal budget is a top concern for business owners. The latest Business Confidence Survey from HR and business services firm Insperity Inc., released today, found 74 percent of companies surveyed were either very concerned or had elevated concerns about the federal deficit and total national debt.

The report also found confidence slipping. Although businesses are growing this year, 40 percent are now delaying their expectations of an economic rebound to the first quarter of 2012 or later, the survey found. Just 12 percent reported a belief that the recovery is under way, down from 23 percent in Insperity's last quarterly survey.

In the survey of 5,700 small and medium-sized businesses businesses, conducted in mid-July, 32 percent reported adding new workers, down from 37 percent in the last poll. Sixty-two percent are maintaining current staffing levels, up from 57 percent last quarter, and 6 percent are laying off employees, flat from Insperity's last report.

Business owners' leading short term concern: The economy, followed by health care costs and operating costs. For the longer term, the federal deficit and national debt topped the list of worries, followed by the economy and potential tax increases.

What do you think: Will a federal debt compromise ease business owners' fears, or will other economic factors continue to dampen growth?

In other economic news:

Online job postings across the U.S. fell by 217,000 in July to about 4.15 million, according to a new report from The Conference Board. That follows a decline of 100,000 in June after a virtually flat period in April and May. There are about three job-seekers for every advertised opening, the report found.

Even children are feeling the pinch: A recent Visa Inc. survey found that the Tooth Fairy now leaves an average of $2.60 per tooth - down 13 percent from last year's payout, $3 per tooth. The eastern U.S. seems to have taken the biggest hit. Children there get about $2.10 per tooth these days, down from $3.40 in 2010.

Consumer sentiment and the slowing recovery

Recent reports of a slowing economic recovery have begun to affect consumers' attitudes toward spending and their overall finances, a new study shows.

The Discover U.S. Spending Monitor, which tracks consumer sentiment, recorded its largest drop ever in June. The monitor, a daily poll of 8,200 consumers, fell 4.4 points from May to the lowest level since July 2009.

More than 60 percent of U.S. adults surveyed rated the economy as "poor," and nearly 56 percent said the economy is getting worse. For the first time since July 2009, more than half of respondents reported their personal finances are worsening, the poll found.

"In the absence of good economic news, such as on the jobs front or with housing prices, more Americans are growing pessimistic about their long-term financial outlook and the outlook for America's economy generally," Julie Loeger, Discover's senior vice president of brand and product management, said.

Consumer confidence is a critical part of the economic recovery, driving spending decisions on everything from new clothes to new homes. What do you think: Do these trends hold true in the Charlotte area?

In other economic news:

Businesses with less than 20 employees created 45,000 new jobs across the U.S. in June, according to Intuit Payroll's Small Business Employment Index. That's a growth rate of 0.2 percent, or 2.7 percent annually. Small-business hiring grew 0.4 percent in North Carolina in June, faster than the average 0.2 percent for the South Atlantic region, the report found. Nationally, pay and hours worked increased, too, Intuit found.

An economic index from N.C. State University rose in May, the first monthly gain since February. Improvement in building permits, manufacturing work hours and manufacturing earnings drove the increase, according to the report from economist Mike Walden. The index was down slightly from a year ago - but the monthly increase suggests the economy could pick up in the second half of the year, the report said.

Report: Businesses uneasy, but some plan to hire

A new Federal Reserve report is the latest to suggest the economic recovery is losing ground.

The monthly Carolinas Survey of Business Activity's business conditions index fell again in June, a sign that region's recovery has slowed even further. The index was positive for the seventh straight month - meaning more survey respondents saw an increase in business activity than a decrease - but barely.

It fell five points from May to 3, the lowest level since October, the Fed said. That measure has declined steadily since the beginning of the year as business owners' perceptions of sales growth have weakened.

Meanwhile, a measure of firms' expectations for the next six months also fell in June, suggesting companies aren't as optimistic about future business activity.

The survey, released today, comes on the heels of other dismal economic news. Last week, government data showed Mecklenburg County's unemployment rate ticked up to 10.2 percent in May from 9.9 percent the month before. And Federal Reserve Chairman Ben Bernanke warned that some of the problems slowing the U.S. economy could persist into next year.

Somewhat surprisingly, though, Carolinas businesses are still hiring, the Fed found. Its labor demand index, which measures the number of employees, climbed four points in June. Expectations for hiring fell slightly but remained solidly in positive territory, meaning businesses plan to boost hiring in the next six months.

Still, companies don't expect a labor shortage anytime soon, and "that slack is likely to keep downward pressure on wage growth," the Fed report said.

The report suggests companies are more anxious about the economic recovery than they were a few months ago, when most indicators pointed to slow, steady growth. What do you think? Are sales - and hiring - still improving?

Notes on long-term unemployment

Long-term unemployment is one of the biggest concerns among lawmakers and job-seekers as the economy inches toward recovery.

The Federal Reserve focused on the topic in a recent report, exploring the causes and implications - and raising a few interesting points. Some highlights:

The number of people out of work more than six months has reached levels not seen in the U.S. since the Great Depression. The share of long-term unemployed peaked at 46 percent of all job-seekers in mid-2010, for instance - nearly double the previous peak of 26 percent in the early 1980s. From 1960 to 2010, the average length of unemployment was about 14 weeks. By comparison, the average duration of unemployment in mid-2010 was 35 weeks.

The increase is a result (unsurprisingly) of a more difficult job market than those that followed past recessions, meaning fewer people exiting unemployment, the Fed found.

The availability of extended jobless benefits can affect how long someone remains out of work, the report said. That's because those benefits give job-seekers the ability to hold out for a better offer. The Fed cites a survey that estimated increasing jobless benefits - by as many as 73 weeks, in some cases - might have lengthened the average duration of unemployment by two to six weeks. Still, the Fed notes, that's well below the actual 18-week increase in the average length of unemployment from 2008 to 2010 - meaning other factors are at play.

Older workers do indeed have a harder time finding a job than their younger counterparts, the Fed reported. The average length of unemployment for older workers is more than twice that of younger workers, despite an unemployment rate for older workers that's less than half that of younger ones. That means older workers are less likely to lose their jobs, but once they do, they have a slimmer chance of finding new jobs than younger workers.

What do you think of the Fed's findings?

In other economic news:

Goodwill Industries of the Southern Piedmont has teamed up with Central Piedmont Community College to help veterans find work. Using a grant from Microsoft Corp. of cash and software, worth as much as $8 million, the groups will provide vets and their families with services such as technology training and career counseling. For details, visit www.goodwillsp.org/operationindependence.

Queens University of Charlotte will host a program June 6 about women and finances. "Financial Outlook for Women Across Race & Culture in Today's Economy" is being presented by the Women's Inter-Cultural Exchange and TIAA-CREF. It features a panel discussion and luncheon focusing on women's relationships with money and financial planning. Registration is $15 for inter-cultural exchange members and $20 for nonmembers. For details or to register, visit http://www.wi-ce.org/.

What employers want

The government's latest jobs report shows employers hired 244,000 people in April - and yet as we all know, competition remains fierce, and thousands remain out of work. So who is actually getting hired?

A new survey suggests the qualities employers look for haven't changed much since the recession began. But companies are using different tactics to recruit workers - meaning it's important to stay up to speed not only on what employers want, but also how they plan to find you.

Global talent management firm OI Partners-Compass Career Management Solutions found recently that employers want workers who are experienced, team oriented, customer focused, smart and capable of achieving results.

The nearly 200 companies surveyed said they're using social media such as LinkedIn more than last year to recruit candidates. They're also using their company websites, obtaining referrals from current workers and hiring people first as contract employees more frequently than in the past, the poll found.

"Employers are being more selective in the types of employees they want and the methods they are using to find and interview them," said Robyn Crigger, managing partner of OI Partners-Compass Career Management Solutions in Charlotte.

Some bright news: More than half of the companies surveyed have increased hiring. But about a third said it's taking longer to hire this year as companies make sure their business justifies additional staff and conduct more interviews to confirm they're selecting the best candidate.

Employers are also interviewing candidates by phone more often and are more frequently using team interviews and behavioral interviews, the survey found.

The types of employees in highest demand: operations workers, such as customer service reps, followed by sales, IT, administration, finance and HR workers, the report found.

Job-seekers, have you noticed anything different about your search this year? What has worked for you - and what hasn't?

Small businesses add jobs, remain cautious

Two new reports show meaningful gains for small businesses - and continued uncertainty related to the slow economic recovery.

HR advisor Insperity's Business Confidence Survey found small-business owners are hiring more workers and boosting pay in anticipation of increased business in 2011. Nearly 40 percent of respondents said they were adding jobs, the report released today said, up from 24 percent last fall. Still, just 23 percent believe an economic rebound is under way, with 40 percent saying they expect it to occur in the second half of this year or later.

"We're starting to move in the right direction, led by the flexibility and adaptability of this vital segment of the business community," Insperity CEO Paul Sarvadi said.

Yet difficulties remain: Insperity's internal data suggest entrepreneurs are still taking a more conservative approach to employment-related decisions, the report said. Overtime made up 8 percent of workers' pay, for instance, down from about 9 percent in November - still below the 10 percent level that often indicates a need for more employees, Insperity said.

Meanwhile, Intuit Inc.'s monthly Small Business Employment Index, also out today, found businesses with fewer than 20 employees created 60,000 new jobs in April. Employment grew 0.3 percent that month, for an annual growth rate of 3.6 percent. N.C. job growth was 0.3 percent in April, too, Intuit found.

"Small-business employment is showing continued strength," said Susan Woodward, the economist who helped Intuit create the index. "... While we have a long way to go to full employment, we have seen continued improvement now for a year and a half."

Pay increased 0.5 percent in April to $2,653 per month - about $31,800 per year - while monthly hours worked increased 0.7 percent, the report found. The index is based on figures from small businesses that use Intuit's online payroll tools.

That rising pay continues a trend that began about six months ago, Woodward said. But it's due in part to employees working more hours - "so despite this slight rise in compensation, the small business labor market is still soft, and employers have room to hire without pushing wages up," she said.