Small Business Fueling U.S. Economy By Hiring

CNNMoney reports that the small business sector added 100,000 jobs in February, keeping pace with 101,000 in both December and January, according to data compiled by ADP, a payroll processor. Small businesses have ramped up their hiring in recent months, fueled by a recovering economy and more optimistic business owners.

Small businesses, defined as firms with fewer than 50 employees, started hiring in January 2010 and have been adding jobs consecutively for the last 12 months, according to ADP.

Small firms are considered the engines of job growth, so the hiring is crucial for the nation’s struggling labor market, with an unemployment rate at 9%. Of the 217,000 jobs added last month, 46% of them were added by small businesses.

The overwhelming majority of the job growth in the small business sector — over 97,000 jobs — were service jobs in the most recent month. Only 3,000 were in the goods producing sector.

Small business still has a long way to go when it comes to job creation however. The sector shed 2.7 million jobs between April 2008 and February 2010. It has added only 607,000 jobs between March of 2010 and last month, based on ADP data. ◆