Paychex | IHS Markit Small Business Employment Watch: 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 percent ($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 four percent
- Dallas remains the best metro for small business jobs; Riverside leads in wage growth
- Construction declined 1.89 percent, the weakest 12-month growth rate among industries; Other Services and Leisure and Hospitality have the strongest wage growth
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 percent 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 percent ($0.72) year-over-year.
“Small business job gains have slowed, consistent with tightening labor markets. Wage gains continue at a moderate pace, up 2.88 percent 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.”
June 2017 Paychex | IHS Markit Small Business Employment Watch
National Jobs Index
- Despite a strong start to 2017, the national index, now at 100.10 after four consecutive declines, is at its lowest level since late 2011, with employment growth conditions returning to the levels established during the base year of 2004. This coincides with the U.S. unemployment rate declining to similar levels of that time, per the BLS.
- Continuing its deceleration, the Small Business Jobs Index declined 0.24 percent to 100.10, the lowest one-month growth rate in four years.
National Wage Report
- Up 2.88 percent year-over-year, hourly earnings growth was unchanged from revised May data.
- The 12-month growth in weekly earnings accelerated to 3.10 percent, helped by a 0.25 percent increase in weekly hours worked.
Regional Jobs Index
- Small business job gains slowed in all four regions.
- At 100.85, the South is the only region with an index level significantly greater than 100, signifying faster growth than in the 2004 base year.
Note: Percentages displayed in the regional heat map reflect 12-month changes.
Regional Wage Report
- Averaging $26.99 per hour, the West has the fastest wage growth among regions, up 3.58 percent ($0.93) year-over-year.
- The Midwest has the best 12-month growth rate for hours worked among regions, up 0.50 percent, increasing to 32.02.
Note: Percentages displayed in the regional heat map reflect 12-month changes.
State Jobs Index
- Eleven of 20 states now have index levels below 100, with New York falling to last place among states for the second time in 2017.
- Down 1.48 percent from May and 4.47 percent from last June, Washington had the weakest performance among states and currently ranks twelfth after leading in employment growth for most of 2015 and 2016.
Note: Analysis is provided for the 20 largest states based on U.S. population. The chart’s dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.
State Wage Report
- Washington and Arizona are the only states experiencing more than four percent weekly earnings growth.
- Arizona has the best hourly earnings gains, while Washington has the best weekly hours worked gains.
Note: Analysis is provided for the 20 largest states based on U.S. population
Metropolitan Jobs Index
- Down 5.09 percent year-over-year, once-strong small business job gains in Seattle have slowed rapidly, with its index in June now below the national baseline at 99.62.
- With the only index above 102, Dallas leads all metros in small business job growth for the fourth consecutive month. Atlanta and Miami rank second and third with indexes above 101.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population. The chart’s dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.
Metropolitan Wage Report
- Averaging $22.76 per hour and up 4.92 percent year-over-year, Riverside leads metros in hourly earnings growth.
- Both below two percent, St. Louis and Philadelphia have the weakest hourly earnings annual growth among metros.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Industry Jobs Index
- Despite ranking last, Manufacturing is the only industry to increase the pace of small business job growth during the first half of 2017.
- Small businesses in the construction industry had the steepest decline since last year, 1.89 percent, with Other Services close behind, down 1.80 percent.
Note: Analysis is provided for seven major industry sectors. The chart’s dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.
Industry Wage Report
- Leisure and Hospitality and Other Services lead industries in wage growth, gaining more than four percent annually.
- Hourly earnings growth is the weakest in the Education and Health Services sector, up 2.39 percent.
- Weekly hours worked increased in all industry sectors except Manufacturing, which saw a slight 0.02 percent decrease year-over-year.
Note: Analysis is provided for seven major industry sectors.
For more information about the Paychex | IHS Markit Small Business Employment Watch, including interactive charts detailing all data at a national, regional, state, metro, and industry level, visit https://www.paychex.com/employment-watch/#!/ and sign up to receive monthly Employment Watch alerts.
*Information regarding the professions included in the industry data can be found at the Bureau of Labor Statistics website.
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.
Paychex, Inc. (NASDAQ: PAYX) is a leading provider of integrated human capital management solutions for payroll, HR, retirement, and insurance services. By combining its innovative software-as-a-service technology and mobility platform with dedicated, personal service, Paychex empowers small- and medium-sized business owners to focus on the growth and management of their business. Backed by 45 years of industry expertise, Paychex serves approximately 605,000 payroll clients as of May 31, 2017 across more than 100 locations and pays one out of every 12 American private sector employees. Learn more about Paychex by visiting www.paychex.com, and stay connected on Twitter and LinkedIn.
About IHS Markit (www.ihsmarkit.com)
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and expertise for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.
IHS Markit is a registered trademark of IHS Markit Ltd and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2017 IHS Markit Ltd. All rights reserved.
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