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Seasonally adjusted, a net 36 percent of owners nationwide reported raising compensation in June, down five points from May and the lowest since May 2021. A net 22 percent of owners plan to raise compensation in the next three months, according to NFIB’s monthly jobs report.
“The labor force participation rate remains below pre-COVID levels, which is contributing to the tight labor market seen on Main Street,” said NFIB Chief Economist Bill Dunkelberg. “With labor demand remaining strong, owners will have to continue raising compensation to compete and fill their open positions, although that pressure is easing a bit.”
State-specific data is unavailable, but NFIB State Director Rosemary Elebash said, “Alabama’s unemployment rate reached a record low 2.2 percent in May. With more Alabamians working than ever before in the state’s history, the labor participation rate continues to be stuck at 43 percent with many people between the ages of 16 through 64 not participating in the labor force.
“The state Legislature appropriated more dollars for the Alabama Community College System (ACCS) to continue the implementation of quick credentialing through the ACCS Innovation Center for needed jobs identified by businesses in Alabama,” Elebash said. “NFIB members continue to partner with the 24 campuses throughout the state to provide input for career with technical training.”
Forty-two percent of owners nationwide (seasonally adjusted) reported job openings they could not fill in the current period, down two points from May. The share of owners with unfilled job openings far exceeds the 49-year historical average of 23 percent although it is nine percentage points lower than the record high of 51 percent last reached in May 2022.
The percent of small business owners reporting labor quality as their top small business operating problem remains elevated at 24 percent, unchanged from last month. Labor costs reported as the single most important problem to business owners decreased two points to 8% in June, five points below the highest reading of 13 percent reached in December 2021.
Small business owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 15 percent planning to create new jobs in the next three months, down four points from May and 17 points below its record high reading of 32 reached in August 2021.
Overall, 59 percent of owners reported hiring or trying to hire in June, down four points from May. Of those hiring or trying to hire, 92 percent of owners reported few or no qualified applicants for the positions they were trying to fill. Thirty-three percent of owners reported few qualified applicants for their open positions and 21 percent reported none.
Thirty-five percent of owners have job openings for skilled workers and 18 percent have openings for unskilled labor.
