According to the latest Paychex | IHS Markit Small Business Employment Watch, wage growth accelerated in April, while the pace of monthly small business job growth continued to tighten. The Small Business Jobs Index fell 0.12 percent for the month and is down 0.96 over the past year to 99.53. Hourly earnings grew $0.70 to $26.56, up 2.69 percent from last year.  One-month annualized hourly earnings growth in April was 3.25 percent, reaching a two-year high.

Phoenix remains far ahead of other metros in wage growth with 4.80 percent annual hourly earnings growth, almost a full percentage point above the next highest metro (San Diego at 3.81 percent).

 “The 2018 moderation in small business job growth continued apace in April, reflecting tightening labor markets across the country,” said James Diffley, chief regional economist at IHS Markit.

“The low unemployment rate is contributing to steady increases in wage growth,” said Martin Mucci, Paychex president and CEO. “With tightening labor conditions and wages continuing to show positive momentum, business owners and HR managers will need to focus on recruitment and benefit strategies to attract and retain qualified talent.”

National Wage Report

• April’s 3.25 percent one-month annualized hourly earnings growth was the best rate in more than two years.

• Hourly earnings growth has been consistent the past quarter, though annualizing the one-month and three-month growth rates signals positive movement ahead.