Strength in Small Business Hiring and Wage Growth Persists; Growth Rates Moderate Little From the Prior Month

Strength in Small Business Hiring and Wage Growth Persists; Growth Rates Moderate Little From the Prior Month
Written by Rajesh Tamada

Small businesses continued to add jobs in June and worker wages continued to grow at a strong rate, but the pace of growth moderated slightly from previous month.

Small businesses continued to add jobs in June and worker wages continued to grow at a strong rate, but the pace of growth moderated slightly from previous month. These insights are according to the latest Paychex | IHS Markit Small Business Employment Watch. The Small Business Jobs Index for June was 100.81, up 2.32 percent from over a year ago and -0.06 percent from the previous month. Average hourly earnings growth for the month stood at 5.10 percent, compared to 5.16 percent from May 2022.

“The small business economy still is in recovery phase with continued job gains, and, surprisingly, moderating wage gains,” said James Diffley, chief regional economist at IHS Markit.

“Our June report shows continued job growth for small businesses. The pace of that growth slowed slightly from the previous month, however,” said Martin Mucci, Paychex CEO. “This month’s data also showed a slight decline in hourly earnings growth, the first decrease in 13 months. Despite this, growth remains strong, above five percent.”

In further detail, the June report showed:

  • At 100.81, the national jobs index is up 2.32 percent over a year ago.
  • Hourly earnings have increased $1.48 during the past year, now reaching $30.42.
  • The South continued as the top region for small business job growth, with Texas and Dallas leading among states and metros, respectively.
  • The South was also the top region for hourly earnings growth.
  • Ohio was the top state for hourly earnings growth, followed closely by Arizona and Florida.
  • Leisure and hospitality reported the strongest hourly earnings growth among industry sectors for the 16th consecutive month.
  • Hourly earnings growth in the Construction sector hit 5.00 percent and again posted a new record level since reporting began in 2011.

Paychex solutions reach 1 in 12 American private-sector employees, making the Small Business Employment Watch an industry benchmark. Drawing from the payroll data of approximately 350,000 Paychex clients with fewer than 50 employees, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro, and industry sector activity.

News Source: Yahoo Finance