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Ray of hope for small-business hiring

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CIOL Bureau
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WASHINGTON, US: Small businesses inched closer to adding jobs in July, a survey showed on Thursday, offering a faint glimmer of hope for the long-suffering labor market a day before government employment data is released.

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The National Federation of Independent Business's monthly employment poll showed that 10 per cent of small businesses added jobs last month, up from 5 per cent in June, while 15 per cent cut. The rest made no change to their labor force.

The July report showed a seasonally adjusted loss of 0.15 workers per firm for the prior three months, down from June's loss of 0.28.

"This suggests that private sector job growth is improving and the unemployment rate shouldn't rise and might even surrender a tenth of a point or two," NFIB economist William Dunkelberg said.

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"Still, we need 300,000 net new jobs a month for 3 years to get back to 2007 employment levels, and that's just not in our immediate future," he added.

Economists polled by Reuters think Friday's payrolls report will show the unemployment rate ticked up to 9.6 per cent in July from 9.5 per cent a month earlier.

They were looking for an overall payroll decline of 65,000, although much of that is tied to the end of temporary Census jobs. Private employers are expected to add 90,000 positions.

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Over the next three months, 10 per cent of firms polled plan to cut jobs, up 2 percentage points from the prior month, while 9 per cent intend to create new posts, down 1 point.

The poll is based on 2,029 responses from NFIB member firms, who were surveyed through July 31.

Small businesses are normally a major source of jobs but they have been particularly reluctant to hire lately because of weak sales and uncertainty about the pace of the recovery.

The White House wants to funnel more money to small-business lending in hopes of spurring hiring. A bill that would free up $30 billion is awaiting Senate approval.