NFIB’s May jobs report indicates that the labor market for small businesses remained challenging. Thirty-four percent of small business owners reported unfilled job openings in May, a figure unchanged from April and the lowest since January 2021.
“Amid uncertainty, small business owners’ hiring plans remain subdued in May,” said Chief Economist Bill Dunkelberg. “Compensation pressures have also eased offering some much needed relief for many owners.”
While specific state data is not available, NFIB State Director Jason Espinoza commented on the situation in New Mexico: “Unfortunately, our members here in New Mexico aren’t immune to the hiring challenges we’re seeing across the country. Main Street wants to hire, but qualified applicants are in short supply.”
Overall, 55% of small business owners were hiring or attempting to hire in May, a slight decrease from April. Of those hiring or trying to hire, 48% reported few or no qualified applicants for their positions. Specifically, 29% noted few qualified applicants and 19% reported none.
Openings for skilled workers increased slightly to 30%, while openings for unskilled labor remained steady at 13%. The construction, transportation, and manufacturing sectors had the highest number of job openings; meanwhile, wholesale and professional services industries had the least.
A net 12% of owners plan to create new jobs over the next three months—a slight drop from April. The percentage of owners citing labor quality as their top operating problem decreased by three points to 16%, while those reporting labor costs as their main issue rose by one point to 9%.
In terms of compensation trends, a net 26% of small business owners raised pay in May—a seven-point drop from April—marking the lowest level since February 2021 and representing the largest monthly decline since April 2020. However, a net 20% plan to increase compensation over the next three months—up by three points from April.
