The Paychex | IHS Markit Small Business Employment Watch closed the year with a decline in small business job growth and continued, moderate growth in hourly earnings. The Small Business Jobs Index stands at 98.88 in December, down 0.13 percent for the month and 0.82 percent for the year. At $26.95, hourly earnings in December gained 2.42 percent ($0.64) year-over-year and averaged a growth rate of 2.49 percent for 2018.
With an index of 100.46, Phoenix is third among metros in small business employment growth. Arizona as a whole ranks second among states in job growth with an index of 100.05. With regards to wage growth, Phoenix ranks second among metros in with a rate of 4.02 percent YOY. Though decelerating, Arizona still leads states in wage growth at 3.48 percent.
“At 98.88, the Small Business Jobs Index continued its decline through the end of 2018, confirming that it’s a difficult hiring environment for the country’s small businesses,” said James Diffley, chief regional economist at IHS Markit.
“With the positives of a strong economic environment and the prospects for growth under tax reform, small employers were challenged throughout 2018 with job growth due to the difficulty of recruiting employees given the historically low rates of unemployment,” said Martin Mucci, Paychex president and CEO.
Broken down further by geography and industry, the December report showed:
• The top regions for employment growth and wage growth, respectively, are the South and West.
• Wisconsin and Arizona are the strongest states for small business job growth; Arizona is the top state for wage growth.
• Dallas remains first among metros in job growth; Riverside, California is once again the top metro for wage growth.
• Hourly earnings growth in Leisure and Hospitality increased 4.02 percent in 2018, best among all industry sectors.
The complete results for December, including interactive charts detailing all data at a national, regional, state, metro, and industry level, are available at www.paychex.com/employment-watch.