Job openings among small businesses dropped to their lowest level since December 2020, according to the National Federation of Independent Business (NFIB) July jobs report. The report shows that 33% of small business owners had job openings they could not fill in July, a decrease of three points from June but still above the long-term average of 25%.
Labor quality remains a significant issue for small business owners. In July, 21% cited it as their most important problem, an increase of five points from June and the largest monthly rise since August 2022.
Chief Economist Bill Dunkelberg commented on the findings: “The challenge of finding qualified workers is easing overall but still remained significant for many small business owners in July. The easing labor market pressures are also reflected in fewer firms raising compensation.”
Although there is no state-specific data available, NFIB State Director Katie Burns addressed the situation in Arkansas. “We know our members here in Arkansas want to hire, but labor quality remains an issue. That makes it harder for small business owners and their current employees to meet customers’ needs. Hopefully, with the steps lawmakers took to bolster job training and strengthen our state’s workforce, these challenges will begin to dissipate,” she said.
The report notes that 57% of small business owners were hiring or trying to hire in July, down one point from June. Of those seeking workers, 84% reported few or no qualified applicants for open positions—down two points from June—with 29% saying there were few qualified applicants and 19% reporting none.
Openings for skilled workers accounted for 29%, while unskilled labor openings made up 12%, both slightly lower than the previous month.
The construction, wholesale, and transportation industries reported the highest number of job openings; finance and agriculture had the lowest.
A net 14% of owners plan to create new jobs over the next three months—up one point from June and above the historical average of net 11%.
In terms of compensation, a seasonally adjusted net 27% raised pay in July—a drop of six points from June—while a net 17% plan increases over the next three months. Labor costs as a primary concern fell by one point to nine percent.
For more details, readers can access the full NFIB Jobs Report through this link.
