ADP: Small Companies Add 110,000 Jobs to U.S. Financial system

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ADP Small Business Report, November 2020 - 110.00 jobs added

US small business employment growth is picking up, but at a slower pace than it was at the beginning of 2020.

According to the November ADP Small Business Report, small business employment in the private sector increased by 110,000 jobs from October to November. This is only a marginal decrease from September through October numbers, but is well below the nearly one million new jobs reported in June.

ADP Small Business Report, November 2020

The ADP Small Business Report, produced by the ADP Research Institute in conjunction with Moody’s Analytics, captures the employment figures for private sector companies with 49 or fewer employees. Small businesses with between 1 and 19 employees saw the greatest growth with 60,000 new jobs, while businesses between 20 and 49 added slightly less than 50,000 jobs.

Service sector responsible for profits

The service sector was responsible for the net growth, creating a total of 114,000 jobs. Most of that, 68,000 or nearly 60%, came from the smallest companies. The goods-producing sector, on the other hand, recorded a net loss of 5,000 jobs.

Although larger small firms in this sector (20 to 49 employees) received a modest 3,000 new jobs, very small firms lost a total of 8,000. This is likely due to the ongoing impact of the COVID-19 pandemic on smaller local businesses.

While this growth is to be welcomed, it is in stark contrast to the June 2020 numbers, which saw 937,000 jobs created for the American economy from May to June. It’s a little less than the October 2020 numbers, however, which saw a net increase of 114,000.

“While employment growth was seen in November, the pace continues to slow,” said Ahu Yildirmaz, vice president and co-director of the ADP research institute. “Employment growth remained positive in all industries and sizes.”

The number of franchises increased compared to the June report

ADP’s National Franchise Report found the US added 33,700 new franchise jobs as of November. That figure is less than a third of the small business figure in November. Almost 16,000 jobs have been cut since the October Franchise Report, which saw employment growth of 49,600.

The largest increases were recorded in restaurants (20,100), followed by auto parts and dealers (11,100). The good news is that the other sectors included in the report – grocery retailers, business services, housing, and real estate – all posted gains, albeit small ones, 1,000 or less.

ADP National Franchise Report

Image: ADP