US Small Business Hiring Plans Hit 10-Year Low, Payrolls at Risk
Only 9% of US small business owners plan to hire in the next three months, the lowest since May 2020 and a 10-year low excluding the pandemic. Historically, this indicator leads private payrolls by about four months, suggesting nonfarm payroll growth could turn negative by Q3.
The US job market is flashing a warning from its smallest players. In May, just 9% of small business owners said they intend to hire over the next three months — the weakest reading since the start of the COVID-19 pandemic in 2020, and the lowest in a decade when that period is excluded.
Hiring plans among small firms have been trending lower for the past six months. Historically, this metric has served as a leading indicator for nonfarm private payrolls by approximately four months. Since small businesses account for roughly 46% of all private-sector employment in the US, the data implies that overall private payroll growth could turn negative as early as the third quarter of 2025.
The data comes from The Kobeissi Letter, highlighting that hiring demand among small firms is weakening. The trend suggests underlying softness in the broader labor market, with potential implications for economic growth and monetary policy.
Source: The Kobeissi Letter