Small Businesses Thrive Despite High Interest Rates: CBIZ Employment Index Shows 0.17% Increase in Hiring

Struggles in hiring for small businesses appear to be improving

Despite high interest rates, the U.S. economy remains strong and small businesses are expanding their workforces. The CBIZ Small Business Employment Index showed a 0.17% increase in hiring among small businesses in February. According to Anna Rathbun, Chief Investment Officer of CBIZ, the U.S. economy has shown unexpected strength in the current high-interest rate environment.

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 companies were able to sustain their strength and expand their workforces in February, with 20% increasing staffing levels, 60% maintaining headcounts, and 20% reducing staff.

Industries like administrative and support services, arts and entertainment, and technology and life sciences experienced hiring gains, while accommodation and food services, insurance, and utilities witnessed decreases in employment. In terms of regional hiring patterns, the West saw a slight increase 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., with employers adding 275,000 jobs in February, surpassing expectations and displaying the economy’s resilience in the face of high-interest rates. This marked an increase from the previous month’s addition of 229,000 jobs.

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