The Economy

Small Businesses, Franchises Fuel December Hiring

Companies with 49 employees or fewer produced 43% of all private-sector job gains last month, according to ADP.
Katie Kuehner-HebertJanuary 7, 2015
Small Businesses, Franchises Fuel December Hiring

Small businesses have contributed to an uptick in private sector hiring, lifting economists’ hopes for a return to “full employment” by 2016.

U.S. private sector small business employment increased by 106,000 jobs from November to December, according to a report released Wednesday by payroll processor Automatic Data Processing, in collaboration with Moody’s Analytics. Broken down by sector, 12,000 jobs were added by companies that produce goods and 94,000 jobs were added by firms that provide services.

ADP defines small businesses as firms with 49 or fewer employees. Those with 19 or fewer employees added 46,000 jobs, while those with 20 to 49 employees added 60,000 jobs.

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Small businesses’ hiring was a reflection of the increased pace of hiring within the overall U.S. private sector, which added 241,000 jobs from November to December, according to another ADP report.

A Fortune article on Wednesday said that the U.S. private sector has now added more than 200,000 jobs for four consecutive months.

“At the current pace of job growth, the economy will be back to full employment by this time next year,” Moody chief economist Mark Zandi told Fortune.

ADP also reported that 38,000 franchise jobs were added in December.

“At 3.4% for 2014, franchise job growth was notably stronger than the U.S. total private growth rate of 2.2%,” Ahu Yildirmaz, vice president and head of the ADP Research Institute said in a press release. “December’s jobs number was the highest of 2014, bolstered by a large jump in restaurant employment from around 12,000 in November to 24,000 this month.”

Other top sectors in which franchises added jobs include auto parts and dealers, which added 5,720 jobs; business services, 2,990 jobs; and accommodations, 2,790 jobs. Sectors in which franchises cut jobs include real estate, which cut 430 jobs; gas stations and auto repair shops, 580 jobs; and personal services, 1,080 jobs.

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