NEW YORK (AP) — Small businesses significantly slowed the pace of their hiring in December, according to a report released Monday by business software maker Intuit Inc. The drop in hiring is a sign that business owners became more cautious as they awaited the outcome of negotiations in Congress on what's called the fiscal cliff.
Small companies added just 15,000 jobs for the month, half the number created in November. That meant employment in the sector rose just 0.09 percent from the previous month, and 0.12 percent for all of 2012.
The slower hiring pace isn't surprising given that small-business owners grew increasingly anxious and conservative as 2012 progressed. The uncertainty mounted as owners awaited the outcome of the November election and the negotiations in Washington about avoiding the billions of dollars in tax increases and budget cuts scheduled to take effect Tuesday.
Congressional leaders were negotiating to avoid the tax increases and budget cuts that economists believe could drive the U.S. economy back into recession. Consumers are also anxious about the fiscal cliff. The Conference Board said last week that its Consumer Confidence Index dropped sharply in December.
Intuit bases its calculations on data from 170,000 small-business employers who use its payroll products.
The report said that workers' average monthly pay rose 0.5 percent, or $13, to $2,702, in line with increases shown in November. The average number of hours that employees worked rose 0.08 percent in December to 107.4.
The report is the first look at small business employment during December. Three more reports are expected this week, including data from payroll services provider ADP, a survey on hiring by the National Federation of Independent Business and the Labor Department's monthly employment report.