Franchise Hiring Warm in February, Rest of Economy Mild
March 6th, 2019
Franchises have been hard-pressed to find workers in a tight U.S. labor market. But February was not bad for franchise establishments. That rise in franchise hiring compared to other businesses may be an early indicator that hiring in the overall economy is slowing down.
Employment from franchise establishments in the United States rose above average by 24,500 jobs for last month versus the month before, according to the ADP Research Institute’s monthly National Franchise Report. Restaurants and hotels led that growth in their contributions of raw job hiring numbers. Auto dealerships and business service franchises were down. Hiring by franchised real estate offices was flat.
In regard to the overall economy, the change in U.S. non-farm private sector employment mildly rose by 183,000 jobs for the month. Compare that to a rise of 213,000 jobs in January or 271,000 hires in December.
Small businesses of 1 to 49 employees fared worse with a rise of only 12,000 hires in February over January.
“The economy has throttled back and so too has job growth,” said Mark Zandi, chief economist of Moody’s Analytics, which collaborates with ADP Research Institute in issuing the employment reports. "The job slowdown is clearest in the retail and travel industries, and at smaller companies. Job gains are still strong, but they have likely seen their high watermark for this expansion.”
Midsized businesses that have from 50 to 499 employees rose by 95,000 jobs.
We saw a modest slowdown in job growth this month,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Midsized companies have been the strongest performer for the past year. There was a sharp decline in small business growth as these firms continue to struggle with offering competitive wages and benefits.”
The ADP report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis. The trend from ADP's numbers has tightly followed the change in total nonfarm private employment numbers that the federal government’s Bureau of Labor Statistics has issued (see chart above).
Don launched the news site Blue MauMau in the Fall of 2005 after franchise buyers and owners told him that they felt it was almost impossible to shovel through the propaganda and sales spin from business news, disclosures, and even franchise experts in order to make informed and wise investments.
Why is this news site called Blue MauMau? It's metaphorical. Blue MauMau is a South Pacific fish that gathers in schools for protection from sharks and other predators. In an industry that has many impediments in knowing truth at the franchise level, Don created a platform that franchisees from all brands and ilks could use to network together to inform both themselves and reporters about their businesses and industry. This site works when franchise owners participate in what they know. In the past that function has been left largely to the franchisor. I'll still reach out to franchisors, but I do so wanting straightforward answers for our readers—franchisees. This news site aims to continually improve at being "the franchise owner's most trusted news source."
Don is the award-winning publisher of this news site about franchised establishments, Blue MauMau. He can be emailed at editor@bluemaumau.org or tweeted @dsnig.
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