Small Business Job Growth Rebounds in September; Wage Growth Also Increases

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Job growth increased in September, as did hourly and weekly earnings growth, according to the latest Paychex | IHS Markit Small Business Employment Watch. At 98.22, the national jobs index experienced its largest gain in three years (0.21%), breaking with recent trends; however, the index remains down 0.97% year-over-year. In September, hourly earnings growth rose at its fastest one-month pace since 2016 to 2.77% ($0.74). Weekly earnings growth continued its upward trend as well, reaching 2.93%.

“The national index turned up for the first time since February. While still almost a full percentage point below a year ago, it remains to be seen whether this one-month change marks a turning point,” said James Diffley, chief regional economist at IHS Markit.

“Employment and earnings increases in the Construction industry contributed to the encouraging national gains for both jobs and wages in September,” said Martin Mucci, Paychex president and CEO. “Increased optimism from business owners in their ability to fill open positions with qualified candidates and raise wages was also reflected in our Fall 2019 Business Sentiment Report, released last week.”

Broken down further, the September report showed:

• The South remains first among regions in employment growth; hourly earnings growth in the Northeast hit a decade high.
• Tennessee continues to lead states in small business job growth; Illinois remains the top state for wage growth.
• Dallas is again the top metro for job growth; San Diego maintains its lead among metros in wage growth.
• Recent increases in weekly hours worked growth has sparked weekly earnings; the three-month weekly earnings annualized growth rates are higher than the 12-month rates in every industry.