The big jobs growth for economy isn’t helping small business

The latest nonfarm payrolls report shows a labor market nearing a recovery to pre-pandemic levels, but small business owners across the U.S. say that finding and keeping qualified employees remains one of their biggest challenges.

February job growth posting its biggest monthly gain since July, with nonfarm payrolls for the month rising by 678,000 and the unemployment rate at 3.8%, its lowest level since before the pandemic, the Labor Department’s Bureau of Labor Statistics reported Friday.

Across 2021, 6.665 million jobs were added in the U.S., a figure noted by President Joe Biden in this week’s State of the Union address as the largest single-year gain in American history. With the bounce back, the job market is about one million (1.14 million) employed workers short of where it was pre-pandemic, but there is still a large gap in filling open positions, which stood at over 10 million at the end of last year.

Main Street is one area where this labor struggle remains. In February, companies with 500 or more workers added 552,000 positions, according to ADP’s private payrolls report from earlier this week. That was responsible for almost all of the job gains tracked by ADP, while companies with fewer than 50 employees recorded a loss of 96,000 employees during the month.

Fifty-two percent of all small business owners said that it has gotten harder to find qualified people to hire compared to a year ago, according to a recent CNBC/SurveyMonkey Small Business Survey covering the first quarter of 2022. That is up from 50% in Q4 2021.

Twenty-nine percent of small business owners also said that they have positions that have been open for at least three months that they’ve been unable to fill, and 77% of the small businesses with more than 50 employees saying that they expect turnover to likely be a problem for their business six months from now.

“Every data point from every possible source that we have on the economy right now is indicating that we’re in an incredibly challenging hiring market,” said Laura Wronski, senior manager of research science at SurveyMonkey, which conducts the survey for CNBC. “The unemployment rate is low but inflation is high, so wages have to be high to attract workers.”

The latest nonfarm payroll report shows a softening in the sharp wage inflation, as wages were up just 1 cent an hour, or 0.03%, compared to estimates for a 0.5% gain. The year-over-year increase was 5.1%, well below the expectation of 5.8%.

Wronski said that while there has been an influx of newly eligible workers looking for new jobs amid the ‘Great Resignation,’ “it hasn’t gotten easier for small businesses to hire.”

The latest data from NFIB’s monthly jobs report in February showed 22% of small business owners reporting that labor quality was their top business problem, and the percentage…