Small businesses made a sizable contribution to the ranks of the employed in June, posting the largest employment gains of any size business category.

The Washington Post’s J.D. Harrison reported July 3 that employment in the non-farm small business sector increased by 117,00 workers in June, the largest jobs gain in 12 months. The increase was 60 percent higher than the average for January through May, and represented the fastest rate of hiring since the early months of 2012. The figures were released by payroll processing company ADP.

The ADP report also showed that small businesses bolstered the overall jobs gain of 281,000, adding more jobs than private businesses of any size. And as Harrison noted, under the federal definition of small business (500 employees or fewer) rather than ADP’s parameter (50 employees or fewer), 83 percent of the hiring increase came from the sector.

According to Harrison, the statistics represent a significant turnaround small business, which has not experienced growth of 100,000 jobs in six months. June was also the second straight month that small enterprises accounted for 40 percent of nationwide job growth.

Harrison also noted that two other prominent indices reported similar employment figures. The National Federation of Independent Businesses announced last week that it’s survey showed small businesses added an average of 0.05 workers per firm in June. It was the ninth straight month of job increases.

The number of small companies that planned to add workers also increased, according to the NFIB report.

“This signals that the jobs numbers will be solid and the unemployment rate will fall,” Harrison quoted NFIB Chief Economist Bill Dunkelberg as saying in the report.

The numbers also suggest an employment climate “approaching normal levels for a growing economy,” Dunkelberg said.

The payroll firm Paychex also reported an increase in small business employment index of 0.23 percent, nearing a record high, according to Harrison.

Reference:

Harrison, J.D. “Small Business Hiring Surges to Fastest Pace Since Early 2012“; Washington Post. July 3, 2014.