Paychex | IHS Markit Small Business Employment Watch: Small Business Employment Growth Remains Moderate, Wage Growth Continues at a Solid Pace
- The national index declined 0.03 percent to 99.93 in September, continuing to reflect moderate small business jobs growth
- Hourly earnings in September were $26.03, reflecting a YOY growth rate of 2.96 percent ($0.75)
- Weekly hours worked for employees in Houston and Miami declined significantly in September, following Hurricanes Harvey and Irma
Public Company Information:
The Paychex | IHS Markit Small Business Employment Watch shows a slight slowdown in small business job growth in September, while wages continue at a solid pace of growth. The Small Business Jobs Index stands at 99.93, down 0.03 percent from the previous month. The national index has remained relatively flat since June. At $26.03 in September, hourly earnings gained 2.96 percent ($0.75) from a year ago, equal to the pace set in August and slightly below July’s 2.99 percent growth rate.
“From June through September, the national jobs index has settled near 100, matching the moderate small business job growth levels established during the 2004 base year,” said James Diffley, chief regional economist at IHS Markit.
“Despite minor monthly declines following a strong start to the year, small business employment continues to grow at a moderate rate, while wage growth shows sustained strength,” said Martin Mucci, Paychex president and CEO. “What’s particularly noteworthy from September’s data is the sharp decline seen in hours worked in both Miami and Houston, likely a result of the recent hurricanes.”
September 2017 Paychex | IHS Markit Small Business Employment Watch
National Jobs Index
- The national index has essentially remained flat since June, though there have been seven successive declines.
- After several years of strong small business job growth, the national index has moderated and remained consistent with the base year level set in 2004.
National Wage Report
- At $26.03, hourly earnings gained 2.96 percent ($0.75) from a year ago.
- The pace of wage growth in September remains equal to the pace set in August and slightly below July’s 2.99 percent growth rate.
- Weekly earnings continued to accelerate, however, up 3.18% over a year ago, as hours worked in September exceed year-ago levels for the 10th consecutive month.
Regional Jobs Index
- At 99.56, the West is last among regions in small business job growth for the first time in five years and has the weakest one-month and 12-month growth rates as well.
- Improving for the sixth month in 2017, the Midwest region is up 0.25 percent in September and 0.60 percent from last September, and is the only region with a positive 12-month growth rate.
Note: Percentages displayed in the regional heat map reflect 12-month changes.
Regional Wage Report
- Hourly earnings are up 3.62 percent year-over-year in the West, while no other region has reached the three-percent threshold.
- Weekly hours worked are up year-over-year in all regions.
Note: Percentages displayed in the regional heat map reflect 12-month changes.
State Jobs Index
- Despite significant September declines, Tennessee and Indiana still lead small business employment growth among states.
- California dropped again in September to 98.99, and is now the lowest-ranked state.
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
- One-month annualized growth rates for weekly hours worked are down significantly in Florida and Texas, possibly a result of the recent hurricanes.
- Among the wage growth leaders, California saw accelerating gains in September.
- Illinois, Ohio, and Maryland were the weakest states for hourly earnings growth, all with year-over-year gains below two percent.
Note: Analysis is provided for the 20 largest states based on U.S. population
Metropolitan Jobs Index
- Dallas fell from first place in small business job growth to sixth, while Minneapolis jumped seven spots to take the lead among metros at 101.37.
- San Francisco and Los Angeles are now the weakest metros, both at seven-year index level lows.
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
- Weekly hours worked in Houston and Miami both took a sizable downturn in September, potentially a result of Hurricanes Harvey and Irma.
- Riverside, Phoenix, and San Diego remain in the lead among metros for wage growth, though all three slowed in September.
- Philadelphia and Chicago continue to lag with hourly earnings growth below two percent, though Philadelphia improved in September, while Chicago slowed further.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Industry Jobs Index
- Though still ranked last, Manufacturing is the only industry to improve the pace of small business job growth year-over-year, 0.32 percent.
- Other Services (except Public Administration) leads small business growth, however, its lead is shrinking, as the industry again has the weakest 12-month growth rate.
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
- Due to a decrease in hours worked, Leisure and Hospitality weekly earnings gains slowed in September, but remain strong at 4.57 percent.
- Up 3.16 percent from last September, Construction is in the middle of the pack among industries for hourly earnings growth.
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 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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