Steady Increase in Employment for Small Businesses Seen in Latest ADP Study
In a significant development for the employment sector, service providers, particularly franchises, have been the driving force behind job gains this year. This assertion is made by Nela Richardson, the Chief Economist at ADP.
October saw a notable contribution from the franchise industry, with a gain of 35,000 jobs. The most prominent expansion was observed in the burger franchise sector, fuelled by trends such as sustainability, digitalization, and flexible concepts like pop-up stores and ghost kitchens.
The accommodation sector also added 4,500 new jobs, while the auto parts and auto dealers franchises contributed 7,600 new jobs during the same month.
Restaurant franchises also saw a job gain of 21,700 in October. However, it's worth noting that the goods-producing sector within small businesses did not show significant gains in October.
Businesses with 20-49 employees accounted for a substantial portion of these job gains, adding 53,000 jobs. Meanwhile, businesses with 1-19 employees added 62,000 jobs.
Nationally, overall, businesses gained 534,000 jobs during October. This job gain for small businesses was less than the September gain of 574,000, indicating a slight slowdown in the job market recovery.
Despite these gains, the total number of jobs is still 5 million short of pre-pandemic levels, as highlighted by Richardson. The jobs gained since the recovery began have eclipsed 5 million, however.
The service-providing sector within small businesses added 103,000 jobs during October. Interestingly, the franchise job gain in October was higher than the job gain in the service-providing sector within small businesses.
Moreover, the franchise job gain in October was higher than the gain in the goods-producing sector within small businesses, which added 12,000 jobs.
In October, the total job gain for small businesses was 165,000 (115,000 + 53,000). This data underscores the crucial role franchises are playing in the ongoing employment recovery.
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