Paychex | IHS Small Business Jobs Index Rises in January

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The Paychex | IHS Small Business Jobs Index continued to increase in January to 100.62, beginning 2017 at the same pace of employment growth it averaged throughout 2016. Up 0.13% in January and 0.10% in December, the national index increased two months in a row for the first time since last February as employment improved 0.21% during the past quarter. All regions increased in January, except for the South Atlantic, which had a slight decrease of 0.09%. Four of the top five states decreased in January, while nine of the bottom 10 states improved. At 104.17, Tennessee has the strongest index and growth rates among states. With moderate gains in January and indexes exceeding 102, Atlanta, Seattle, and Dallas top the metro rankings. At 104.73, Other Services remains far ahead among industry sectors, while the high-paying Professional and Business Services, Financial Activities, and Manufacturing industries are below 100 to start the year.

 “The Paychex | IHS Small Business Jobs Index indicates small business employment conditions are beginning 2017 on firm footing, recovering from a slowdown of gains during the fall months,” said James Diffley, chief regional economist at IHS Markit.

“The increase in this month’s index tracks with the positive performance of other economic indicators as well as overall business optimism since the presidential election,” said Martin Mucci, Paychex president and CEO.

The January 2017 Paychex | IHS Small Business Jobs Index

National Index

At 100.62, the Paychex | IHS Small Business Jobs Index starts 2017 at the same pace it averaged throughout 2016. Up 0.13% in January and 0.10% in December, the national index increased two months in a row for the first time since last February. Though growth rates continue to fluctuate modestly, small businesses have experienced strong job gains for more than 60 consecutive months dating back to 2011.

Regional Employment

All regions increased in January, except for the South Atlantic, which had a slight decrease of 0.09%. Nevertheless, small business job growth continues to trend strongly in the south; the South Atlantic index has been over 101 for 12 consecutive months. The East South Central region increased once again to a record level, 103.43, to continue as the top-ranked regional index for the third straight month. At 100.73, the Middle Atlantic began 2017 with its strongest index level in more than three years. The West South Central, impacted by low oil prices, has declined 1.81% during the past 12 months and is ranked last among regions. New England remains the second-lowest ranked index among regions at 99.81, despite two strong increases in December and January, 0.39% and 0.21%, respectively.

State Employment Trend

Four of the top five states decreased in January, while nine of the bottom 10 states improved. Trending at a consistently solid level, Florida’s index is 101.90, up 0.01% from last month and 0.06% from last year. At 104.17, Tennessee has the strongest index and growth rates among states. Next in the rankings, small business job growth has been strong in Georgia and Washington with indexes above 102. Georgia and Washington have also shown growth, according to data from the BLS. Illinois, Arizona, Wisconsin, California, and Texas all have indexes lower than their January 2016 levels and are currently below the national baseline mark of 100. Showing signs of a possible recovery, however, Texas improved 0.85% during the past two months and is back to just under the national baseline, at 99.98.

Metropolitan Employment Trend

With moderate gains in January and indexes exceeding 102, Atlanta, Seattle, and Dallas top the metro rankings, but have trended much differently in recent months. Up 1.38% from last year, Atlanta increased to 102.89 and ranks first for the second straight month. After three significant decreases to end 2016, Seattle settled at 102.66 in January. Dallas once again has the worst 12-month growth rate, -3.03%, but has four consecutive monthly gains. Baltimore rounds out the top five and has the strongest 12-month growth rate, 3.13%. At 97.78, despite ranking last among metros, Houston is now moving in a positive direction. Houston followed a strong December, up 0.71%, with an even stronger January, up 0.99%. Down a sizable 1.02% in January, Tampa dropped to 99.05, its fifth decline in the last six months.

Industry Employment Trend

At 104.73, Other Services remains far ahead among industry sectors, while the high-paying Professional and Business Services, Financial Activities, and Manufacturing industries are below 100 to start the year. Though Manufacturing had the best one-month gain, the industry continued with the worst 12-month growth rate as its index has not had back-to-back gains since 2014. Education and Health Services improved 0.25% in January to 101.14, moving up to second place, its best ranking since 2012. Trade, Transportation, and Utilities is up 0.46% during the past three months. At 100.02, Trade, Transportation, and Utilities began 2017 above 100 after only spending one month at that level in 2016.

For more information about the Paychex | IHS Small Business Jobs Index, visit the index website. Plus, view and download the January 2017 Paychex | IHS Small Business Jobs Index infographic. Or, sign up to receive monthly alerts on the Paychex | IHS Small Business Jobs Index.

About the Paychex | IHS Small Business Jobs Index

The Paychex | IHS Small Business Jobs Index is released each month by Paychex, Inc., a leading provider of payroll, human resource, insurance, and benefits outsourcing solutions for small-to medium-sized businesses, and IHS Markit, a world leader in critical information, analytics and expertise, providing analysis of small business employment trends across the U.S. The index analyzes same-store, year-over-year worker count changes to identify and track small business employment trends using real small business payroll data from the Paychex client base. The index is based on aggregated data from approximately 350,000 small businesses with fewer than 50 workers across the United States, one of the largest sample sizes of any small business index or report in the country, and provides timely, accurate insight into national, regional, state, metro, and industry employment activity.