As the focus of stock market watchers, economists, and politicians turns to Friday's release of the February non-farms payroll and unemployment numbers, we thought we'd weigh in again on hiring trends. In the past few days a number of payroll companies have released reports based on their own February numbers. They contain some hopeful signs. On Monday the Intuit Small Business Employment Index, which tracks hiring at companies of fewer than 20 employees, reported another uptick in hiring. The SurePayroll Small Business Scorecard, another measure of small business hiring, reported that in February hiring year-to-date increased 1.9%. And then today the granddaddy of all these private sector reports, the ADP payroll report, noted that non-farm payrolls declined by the least since February 2008. (It's a sign of how bleak the jobs picture is when small job losses are being celebrated as good news).
Back in March we noted in a post that garnered some attention from other bloggers that our metric for measuring the level of hiring activity among our customer base (called, unimaginatively, the Hiring Activity index) had edged upwards in the spring, after reaching its nadir in December and January. Although the national employment picture remains ugly, in June we saw the HAI recover to its highest level since before the stock market crash of the fall. In June the HAI was 65.9, and July it was 66.3, levels not seen since the summer of 08. August saw it dip a little to 62.9. The uptick in hiring activity among our customers, we hope, is another sign of stabilization in the employment picture, at least as far as small and medium-sized businesses are concerned.
There was significant interest in my post about the Hiring Activity Index last month, so I thought I'd follow up. The post was even picked up by the widely read blog of Columbia University statistician Andrew Gelman, who made a chart out of the horrible table I posted (mea culpa). There were some great comments on Dr Gelman's blog about the possible utility and limitations of the HAI as an economic indicator, some of which I'll address in a second. After Dr Gelman featured our post it was subsequently picked up in a widely read economics blog written by a University of Oregon economist and then again here too.
At Criteria we develop and deliver pre-employment testing software that our customers use to help enhance their hiring process. Because our service is web-based we can track our customers' usage patterns pretty closely, and this provides us with great insights into hiring trends across the U.S. (we currently have hundreds of customers in 46 different states.)