Small Business Employment Growth Slows as Hourly Earnings Increase

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The Paychex | IHS Markit Small Business Employment Watch for June marks four consecutive months of decline in small business job growth, but a continued increase in wages. The Small Business Jobs Index decreased 0.24%  to 100.10 in June. The index is at its lowest level since late 2011. National hourly earnings in June were $25.82,  increasing 2.88% ($0.72) year-over-year.

Highlights:

• Small Business Employment Growth Slows as Hourly Earnings Increase
• At 100.10, the national jobs index declined for the fourth consecutive month
• Hourly earnings in June were $25.82, increasing 2.88% ($0.72 YOY)
• South remains the leader in regional job growth; West ranks highest for wage growth
• Tennessee continues to lead in job growth; Washington and Arizona have highest weekly earnings growth, more than 4%
• Dallas remains the best metro for small business jobs; Riverside leads in wage growth
• Construction declined 1.89%, the weakest 12-month growth rate among industries; Other Services and Leisure and Hospitality have the strongest wage growth

“Small business job gains have slowed, consistent with tightening labor markets. Wage gains continue at a moderate pace, up 2.88% from last year,” said James Diffley, chief regional economist at IHS Markit.

“Over the past month we’ve seen continued uncertainty as it relates to legislative policies that stand to impact small businesses,” said Martin Mucci, Paychex president and CEO. “The decline in this month’s index and modest growth in wages seem to reflect an unclear regulatory picture combined with a narrowing labor market.”

About the Paychex | IHS Markit Small Business Employment Watch

The Paychex | IHS Markit Small Business Employment Watch 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. Focused exclusively on small business, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro, and industry sector activity. Drawing from the payroll data of approximately 350,000 Paychex clients, this powerful tool delivers real-time insights into the small business trends driving the U.S. economy.