NEW YORK (AP) — Small businesses picked up their pace of hiring during January after Congress resolved its impasse over the so-called fiscal cliff.
That's the finding of a survey released Wednesday by software maker Intuit, which analyzed payroll data from 170,000 small business owners who use its products.
Intuit said employment at small companies rose by 0.11 percent, or 20,000 new jobs. That was up from 15,000 jobs in December, when many companies put hiring on hold while they waited for lawmakers to agree on a package of tax increases and budget cuts. Economists had warned that without an agreement, the country might "go over the cliff" and fall back into recession.
But small businesses remain cautious despite the last-minute agreement that raised some taxes and put off debate on budget cuts. January's hiring pace was below the 30,000 new jobs small companies added in November. That may be because owners don't know yet what impact higher taxes will have on consumer spending. A 2 percentage point cut in Social Security taxes expired on Dec. 31, giving wage earners smaller paychecks in the new year. A survey released by the Conference Board Tuesday showed consumer confidence plunged in January as take-home pay shrank.
The Intuit survey also showed that revenue fell 0.4 percent at small businesses in December. Construction was the only industry to see an increase, with its revenue up 0.3 percent. The biggest drops in revenue came in retail and real estate, each down 0.8 percent.