National small business job growth remained at consistent levels in February and hourly earnings growth continued to increase for workers, according to the latest Paychex | IHS Markit Small Business Employment Watch. According to the report, among states, Arizona ranks second in small business job growth in February with an index of 102.93. Among metros, Phoenix ranks fourth in the U.S. for small business hiring with an index of 102.51.
The national jobs index was unchanged for the month at 101.33, matching the record level set in January and increasing 7.83 percent over the past year. Hourly earnings growth reached a new record high, growing to 4.82 percent year-over-year.
“Small business employment gains maintained their recovery pace in February with broad-based gains now somewhat less reliant on leisure and hospitality jobs,” said James Diffley, chief regional economist at IHS Markit.
“U.S. small business job growth and significant hourly earnings increases continue versus last year. The West leads regions for the highest job index result and the South has the highest hourly earnings growth this month, topping five percent,” said Martin Mucci, Paychex CEO.
In further detail, the February report showed:
• At 101.33, the Small Business Jobs Index has improved 7.83 percent from last year (93.97).
• Following eight consecutive one-month increases, the Small Business Jobs Index was flat from the previous month.
• Hourly earnings growth continued its nine-month climb from 2.75 percent in May 2021 to 4.82 percent in February 2022.
• One-month annualized hourly earnings growth (6.83 percent) also reached a new record level in February.
• The South leads all regions in hourly earnings growth.
• Leisure and hospitality leads all sectors with 10.40 percent hourly earnings growth.
• North Carolina surpassed Texas as the top state for small business job growth.
• Dallas extended its position for the sixth month as the top metro for small business hiring.
Paychex business 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. The complete results for February, including interactive charts detailing all data, are available at www.paychex.com/watch.