The Paychex | IHS Markit Small Business Employment Watch started the new year with slight gains in small business job and hourly earnings growth. The Small Business Jobs Index increased 0.04 percent in January to 98.92, though it remains down 0.96 year-over-year. At 2.49 percent ($0.65) in January, hourly earnings growth has improved each month since August with wages now standing at $26.88. Weekly earnings growth, however, has slipped below two percent as weekly hours worked have declined.
Phoenix ranks second among metros in both jobs and wage growth with a jobs index of 100.93 and a wage growth rate of 3.84 percent YOY.
“With a 0.04 percent increase in January, the recent losses seen in small business job growth abated to begin the new year,” said James Diffley, chief regional economist at IHS Markit.
“The uncertainty caused by the government shutdown doesn’t appear to have had a major negative impact on small business hiring, which increased for the first time since May 2018,” said Martin Mucci, Paychex president and CEO. “The job gain is certainly welcome news, but it remains a challenging hiring environment for small businesses given the low unemployment levels.”
Broken down further by geography and industry, the December report showed:
• The top region for both employment and wage growth is the West.
• Wisconsin is the strongest state for small business job growth; California took over as 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.
• With a 0.14 percent increase in January, Construction is back above 100 and ranks second among industries in jobs growth.