While overall private employment increased, firms with 1-49 employees kept employment low in recent months.
Figure 1: Private non-farm employment from CES (blue), including the first benchmark (dark blue), ADP (dark red), ADP firms with 1-49 workers. Source: BLS, ADP via FRED, and author’s calculations.
For firms tracked by the NFIB, employment is down (per firm), although there is enough seasonal variation, it’s hard for me to see what’s trending.
Source: NFIB, accessed 10/5/2024.
The differential effect between small and large firms is not surprising; The financial accelerator suggests that tighter monetary policy will affect debt-ridden firms more than others. The logical conclusion is that monetary policy may be beneficially eased, even if overall economic activity appears to be strong.
Learn more about the host, Jan Groen.
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