Hourly Wage Growth Increased for the Third Month in a Row While Job Growth Slowed Slightly in November

The Paychex | IHS Markit Small Business Employment Watch shows hourly earnings growth increased to 2.38 percent and job growth decreased by 0.85 percent from a year ago  

Tuesday, December 4, 2018 8:30 am EST

Dateline:

Rochester, N.Y.
"With the Jobs Index at its lowest level since 2010, small businesses continue to have difficulty finding workers in the competitive hiring environment of 2018"

The Paychex | IHS Markit Small Business Employment Watch for November shows that the tight labor market continues to make for challenging hiring conditions. The Small Business Jobs Index declined for the sixth consecutive month, falling 0.11 percent from October to 99.01 in November. Despite the low rate of job growth, the rate of hourly wage growth increased slightly, now standing at 2.38 percent ($0.63). 

“With the Jobs Index at its lowest level since 2010, small businesses continue to have difficulty finding workers in the competitive hiring environment of 2018,” said James Diffley, chief regional economist at IHS Markit. 

“Even as the seasonal rush approaches, we’re seeing restrained levels of job growth among small businesses,” said Martin Mucci, Paychex president and CEO. “In the new year, while business and consumer confidence is high, we expect employers will continue to be challenged with the low unemployment rate and rising wage rate levels.” 

Broken down further by geography and industry, the November report showed:

  • The top regions for employment growth and wage growth, respectively, are the South and West.
  • Pennsylvania and Massachusetts are the weakest states for small business job growth; Arizona is the top state for wage growth.
  • Dallas regained its top spot among metros in jobs growth, as did Riverside, California, in wage growth.
  • Construction reached a new record high in hourly earnings growth at 3.31 percent. 

The complete results for November, including interactive charts detailing all data at a national, regional, state, metro, and industry level, are available at www.paychex.com/employment-watch. Highlights are available below.

 

November 2018 Paychex | IHS Markit Small Business Employment Watch 

National Jobs Index

  • The downward trend continues from its recent peak of 100.78 in February 2017, with a 1.76 percent decrease in the pace of small business job growth.
  • Just slightly above 99 in November, the Jobs Index declined for the sixth consecutive month.


National Wage Report

  • Hourly earnings growth improved for the third consecutive month to 2.38 percent.
  • Despite hiring difficulties, the rate of weekly earnings growth continued its decline, from 3.10 percent in August 2017 to 2.41 percent in November 2018.
  • Following nearly two years of positive year-over-year growth, weekly hours worked growth turned negative in October and fell further in November, down 0.18 percent.

 

Regional Jobs Index

  • The Midwest had a strong November increase, up 0.33 percent, and is once again above 99.
  • With an index level of 98.28, small business employment growth in the Northeast remains below the rest of the country.

 

 

Note: Percentages displayed in the regional heat map reflect 12-month changes.

 

Regional Wage Report 

  • The wage gap is widening across regions as hourly earnings in the West ($28.21) are growing at 3.18 percent annually, while the South ($25.86) remains the slowest-growing region at 1.94 percent.
  • Weekly earnings growth is the slowest among regions in the Northeast, 2.05 percent, with one-month and three-month annualized growth rates below two percent.

 

Note: Percentages displayed in the regional heat map reflect 12-month changes.

 

State Jobs Index

  • Once again in November, Pennsylvania and Massachusetts have the weakest small business growth as both indexes fell below 98.
  • Up 0.67 percent in November and 1.22 percent year-over-year, Wisconsin is once again the top-ranked state, with its fifth gain in the last six months.
  • Besides Wisconsin, Arizona is the only other state with an index level above 100.

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

  • Despite slipping below four percent in November, hourly earnings growth in Arizona remains best among states, following its nearly two-dollar minimum wage hike at the start of 2017.
  • Virginia and Texas have experienced extended decelerations in hourly earnings growth, with Virginia last among states at 0.41 percent.

 

Note: Analysis is provided for the 20 largest states based on U.S. population.

 

Metropolitan Jobs Index 

  • With strong overall growth since the recession, Dallas is once again the top-ranked metro in November at 101.52, following a mixed performance last year.
  • Following the state trend, Boston and Philadelphia have the weakest metro indexes, both below 98.

 

 

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

  • With its eighth straight increase at 4.65 percent, Riverside leads California and the nation in metro hourly earnings growth, overtaking Phoenix (4.41 percent).
  • Since the beginning of 2016, hourly earnings growth in Minneapolis was stable at around 3.30 percent, but it has accelerated since the summer, improving to 3.66 percent in November.
  • Houston and Dallas show the weakest wage gains in November, for both weekly and hourly earnings.

 

Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Industry Jobs Index

  • At 99.14, Education and Health Services was the only industry to improve in November (up 0.20 percent).
  • Down 0.02 percent in November and 0.17 percent year-over-year, employment growth in the Construction industry remains steady, with an index above 100.
  • Above 99 as recently as May, Manufacturing has quickly slowed to 97.32 during the past six months.


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  

  • Up 4.02 percent from last year, hourly earnings growth in Leisure and Hospitality hit its highest level in 2018 and continues to have the strongest hourly gains among industries.
  • Since reporting began in 2010, Construction reached a new record high in hourly earnings growth at 3.31 percent.

 


Note: Analysis is provided for seven major industry sectors.

For more information about the Paychex | IHS Markit Small Business Employment Watch, 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.

About Paychex
Paychex, Inc. (NASDAQ: PAYX) is a leading provider of integrated human capital management solutions for payroll, benefits, human resources, 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 more than 45 years of industry expertise, Paychex serves over 650,000 payroll clients as of May 31, 2018, across more than 100 locations in the U.S. and Europe, 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 solutions 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 business and government customers, including 80 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 © 2018 IHS Markit Ltd. All rights reserved.

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Media Contacts 

Lisa Fleming

Paychex, Inc.

585-387-6402

lfleming@paychex.com

@PaychexNews

 

Kate Smith

IHS Markit

781-301-9311

katherine.smith@ihsmarkit.com 


Tess Flynn

Mower

716-880-1488

tflynn@mower.com

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or
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Multimedia Files:

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Paychex IHS Markit Small Business Jobs Index November 2018