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On the radar: NFIB small business jobs report shows average change in employment down in May for first time since September 2017

The NFIB Small Business Jobs Report for May saw the average change in employment at -0.17 after falling to 0.09 in April. The ongoing situation with many businesses closed and/or seeing sharply reduced revenues have led to widespread reductions in payrolls.

The reading for job openings dipped to 23% in May after 24% in April and is at a low not seen in nearly six years. Plans to hire increased slightly to 8% in May after 1% in April and probably reflected hopes of a wider reopening in the economy that could be disappointed if COVID-19 infection rates pick up again.

Unsurprisingly, for those firms hiring, the pool of qualified applicants has expanded and businesses reporting a scarcity of applicants with the desired skills was down to 37% after 41% and at levels not seen in seven years.

Actual compensation continued to decline at 14% in May after 16% in April, but is still above the levels of planned compensation at 10% after 7% in the prior month. However, both are substantially below the trends of the last few years and reflect a softening in the labor market. Gains in pay have lost a lot of momentum and pay increases may be scantier in the aftermath of the downturn.

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