Small Businesses Add 81,000 Jobs from July to August

Cecilia Nysing

The labor market saw a downshift in recovery during August, compared to significant job growth during the first half of 2021.

Private sector employment increased by 374,000 jobs from July to August 2021, which includes 86,000 small business gains.

That’s according to stats from the ADP August 2021 National Employment Report. According to Nela Richardson, ADP chief economist, job gains for the year are approaching 4 million.

But job gains are still 7 million jobs short of pre-Covid levels.

Small Business Employment Gains

Small Business Report August 2021

Small businesses contributed to 86,000 of the overall job gains. That further breaks down into 25,000 gains for businesses with 1-19 employees, and 61,000 gains in businesses with 20-49 employees.

Of the 86,000 small business job gains, 83,000 were in service-providing businesses (27,000 in businesses from 1-19 employees and 56,000 in businesses with 20-49 employees).

The concentration of growth in service-providing small businesses mirrors the national trend. Of the 74,000 gains for all business sizes nationally, 329,000 were in service-providing businesses (201,000 were in leisure/hospitality and 39,000 in health care).

Franchise Jobs Increase

Franchise jobs increased by 52,300, with restaurants (39,000) leading the way.

Accommodations accounted for a 7,500 gain; followed by auto parts/dealers 5,200, and real estate 200.

The business services franchises saw a downturn of 1,000 jobs and food retailer franchises decreased by 400 jobs.

Reasons for the Job Gain Slowdown

National Franchise Report August 2021

“Service providers continue to lead growth, although the Delta variant creates uncertainty for this sector,” said Nela Richardson, chief economist, ADP. “Job gains across company sizes grew in lockstep, with small businesses trailing a bit more than usual.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The Delta variant of COVID-19 appears to have dented the job market recovery. Job growth remains strong, but well off the pace of recent months. Job growth remains inextricably tied to the path of the pandemic.”

About the ADP National Employment Report

Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by the ADP Research Institute® in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual data of those who are on a company’s payroll, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Image: adp


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