Small Businesses Thrive Despite High Interest Rates: CBIZ Employment Index Shows Unexpected Strength in February

Struggles in hiring for small businesses appear to be improving

Despite high interest rates, the U.S. economy has shown unexpected strength in February, according to Anna Rathbun, Chief Investment Officer of CBIZ. Small businesses have been able to sustain this strength and steadily expand their workforces, with the CBIZ Small Business Employment Index indicating a 0.17% increase in hiring among small businesses nationwide.

The index monitors hiring among thousands of businesses with 300 or fewer employees, revealing that 20% of companies increased their staff, 60% maintained their headcounts, and 20% reduced staff. 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. On the other hand, industries like accommodation and food services, insurance, and utilities witnessed decreases in employment.

Regional hiring patterns also varied slightly across the country. The West, Southeast, and Central regions saw slight increases while the Northeast region saw a slight decline. This positive trend in small business hiring aligns with the overall job growth in the U.S., as evidenced by the addition of 275,000 jobs by U.S. employers in February – surpassing expectations and displaying the economy’s resilience in the face of high-interest rates.

Small businesses often struggle to retain employees due to their inability to offer competitive salaries and benefits like health insurance.

However despite these challenges many small businesses continue to grow despite high interest rates which is a positive sign for our economy

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