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Small-Business Job Growth Key to Recovery

Although small-business hiring lagged in 2010-2011, it has picked up steam again and continues to be critical to overall economic health.

Bob Johnson: This week's chart shows a number of jobs added both at small business--those with fewer than 50 employees--and relatively the large business--those with 500 or more employees. You can see right now that small business are adding about 100,000 jobs per month on a three-month moving-average basis, while large businesses are only adding about a third of that at 36,000 jobs. So, the small businesses are absolutely critical.

Also, if you take a little longer-term perspective and look at the graph, you can see that small businesses almost always predominate over corporations in terms of hiring. The one exception to that is after a recession in the early stages of a recovery when a small business tends to perform at about the same level as a corporation. But then once the recovery really gets going, as you can see in the early 2000s, small businesses really outperform those corporations.