Small businesses’ hiring plans shift amid economic uncertainty

A couple of new data points about the labor market came in Tuesday morning — the January Job Openings and Labor Turnover report from the Labor Department and the February Small Business Optimism Index from the National Federation of Independent Business.

The latter found that many businesses are still having trouble filling open positions. But the former found that job openings have fallen almost 9% since the same time last year — a sign that the tight labor market is loosening up.

That said, there is still plenty of uncertainty in this economy, which is weighing on businesses’ hiring decisions. Take Rothmans, a men’s clothing store in New York.

Throughout last year, sales were strong. Co-President Ken Giddon said he went into 2025 feeling optimistic and was planning to hire for two new positions.

“And then the last week or so has definitely made us … think about it a little bit,” he said.

Giddon said Rothmans imports a lot of the clothing it sells. So he’s concerned that the Donald Trump administration’s new tariffs will make that clothing more expensive.

Then there’s the stock market gyrations of recent days, which he said can put his customers on edge.

“We sell clothing, which is not something that is necessary, and if you’re not feeling good about your portfolio, or worried about what’s going on in the big picture, that can sometimes make you slow down,” he said.

As a result, Giddon said he’s putting those two hires on hold. “Sometimes you gotta raise that caution flag just to take a little breath and see what’s going on,” he said.

Meanwhile in Ohio, Heather Whaling, who runs a marketing company called Geben Communication, is seeing similar caution among some of her clients.

“In the nonprofit space, there’s caution in the education space, certainly in construction and real estate development,” she said.

Whaling said that’s affecting her hiring decisions. She’s already brought on three people this year and is planning on hiring more. But that depends on how her clients are feeling.

“We even are in a situation right now where we have a person that I am 98% ready to make a job offer to, but I need to see how a couple more contracts shake out on my end before making that commitment,” she said.

On the plus side, Whaling said she’s having an easier time finding new hires. Same with Randy George, co-owner of Red Hen Baking Co. in Vermont.

“It’s been years, really, since we’ve put out ads and fairly quickly heard from really great applicants,” he said.

George said the bakery is in the middle of moving to a new building that’s almost twice as big as its current location.

Still, his business will be affected by tariffs on Canadian flour. So whatever happens to the larger economy, “it wouldn’t surprise me if we see a downturn in our business in the next four years,” he said. “But we also look beyond that.”

When the business expands, George hopes to staff up.