From ADP, one sees that employment growth has accelerated, small firm employment, and employment share, has decelerated.
Figure 1: Private nonfarm payroll employment in firms 1-19 employees (blue), and share of total private nonfarm payroll employment (red), both s.a. Source: ADP via FRED.
Small firm employment (1-19 employees) constitutes a nontrivial share of total private employment, so it’s of interest to know what’s happening here, and what is likely to happen going forward.
The NFIB survey for May suggests lackluster hiring plans (median employment size for respondents in NFIB survey is 10-15 employees).
Source: May NFIB Jobs Report (4 June 2026).
From the report:
“A seasonally adjusted net 9% of owners plan to create new jobs in the next three months, down 4 points from April and marking the lowest level since May 2020. Plans to hire are now below its historical average of a net 11%.”
It’s no wonder small firms are not planning to hire. In general, optimism is quite low (although ot as low as during the high inflation period of 2022-24).
Source: NFIB May Small Business Economic Trends Report (9 June 2026).
I’m unfamiliar with the predictive power of the NFIB hiring plans differential for future NFP growth — Pantheon Economics asserts a 4 month lead. That being said, even if true, it’s not clear that negative employment growth would be sufficient to warrant a recession call given the small growth in labor force.
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