Franchise Hiring Supersized in July as Small Business Jobs Struggle

Franchised establishments in the United States gained a supersized 41,900 jobs in July, according to the seasonally adjusted ADP National Franchise Report. By far the biggest employment jump was from restaurants, which hired 36,000 of those jobs. With no gain in jobs, lodging was the poorest franchise sector for the month.

Private sector employment increased by 156,000 hires, according to ADP Research.

“While we still see strength in the labor market, it has shown signs of weakening,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

Small businesses, which are categorized as businesses that have between 1 to 49 employees, gained only 11,000 jobs in July, according to ADP Research. The more diminished of the small businesses, those that employ between 1 to 19 employees, lost 18,000 positions during July.

July is the second month in which the gain in jobs from franchised establishments has actually outnumbered the gain from small business hires.

“A moderation in growth is expected as the labor market tightens further,” said chief economist of Moody’s AnalyticsMark Zandi, which collaborates with ADP on the monthly report. “Job growth is healthy, but steadily slowing. Small businesses are suffering the brunt of the slowdown. Hampering job growth are labor shortages, layoffs at bricks-and-mortar retailers, and fallout from weaker global trade.”