July 16, 2014
By Bob Coleman
Editor, Coleman Report
SBA Economist Brian Headd writes . . . .
After almost five years of gradual economic recovery, we are seeing increasingly positive signs from small businesses.
The establishment birth rate (the share of the average of the previous and current total number of establishments) has been showing slow, relatively steady increases.
And the number of employers is on the rise, which is apparent in the increasing gap between establishment birth and death rates. Above all, prosperity is most evident in the upward trend of proprietors’ income, which has increased more than a third in recent years after a lackluster performance earlier in the decade.
Small businesses’ net labor gains are also accumulating. And the slow steady increases in labor turnover rates spell good news for small businesses looking to hire . They are a sign that fluidity is finally returning to the labor market. The pickup in labor market activity could explain the slight downward trend in self-employment because some of these individuals may be choosing wage work as the labor market strengthens.