Paychex index data also shows weekly earnings
growth hit a new record as small business employees work more hours
per week to increase their paychecks
ROCHESTER, N.Y., March 7,
2023 /PRNewswire/ -- The rate of hiring for U.S.
small businesses increased in February led by hiring in the leisure
and hospitality industry according to the latest Paychex | IHS
Markit Small Business Employment Watch. The Small Business Jobs
Index, which measures national employment growth for businesses
with fewer than 50 workers, continued to increase to 99.66 while
the rate of hourly wage growth declined to 4.49 percent
year-over-year in February. The one-month annualized hourly wage
growth rate remained below four percent for the third consecutive
month.
"Small businesses have posted positive job gains to begin 2023,"
said James Diffley, chief regional
economist at IHS Markit. "At the same time, hourly wage increases
are moderating, which is in the right direction for a soft
landing."
"This employment growth and cooling wage inflation in February
show small businesses are demonstrating resiliency as they navigate
the current economic environment," said John Gibson, Paychex president and CEO. "Given
the slowing wage increases, employees of small businesses seem to
be contending with inflation by increasing their hours worked."
In further detail, the February report showed:
- At 99.66, the pace of small business employment growth improved
in January (0.18 percent) and again in February (0.10 percent) to
begin 2023.
- The national index (99.66) is down 1.64 percent from the record
level set last February (101.33).
- At 100.84, leisure and hospitality improved for the fourth
straight month and reported its largest one-month gain since
January 2022.
- At 99.86, the Midwest has had the strongest one-month change
rate among regions for the past three months. The Midwest, led by
Illinois, has gained 0.77 percent
during the past quarter.
- North Carolina gained 0.37
percent in February to improve its index to 102.57. North Carolina has ranked first among states
since June 2022 and has had an index
above 102 since October 2021.
- Houston (103.16) leads metros
in the rate of small business employment growth in February. The
next strongest metros, Chicago
(101.55), Atlanta (101.47), and
Phoenix (101.41), all trail
Houston by more than a point and a
half.
- Construction trails only leisure and hospitality in growth for
hourly earnings (5.11 percent), weekly earnings (5.98 percent), and
weekly hours worked (0.69 percent).
- Hourly earnings growth slowed further to 4.49 percent in
February as one-month annualized growth remained below four percent
for the third consecutive month.
- Due to the positive momentum in weekly hours worked, weekly
earnings growth reached a new record level in February (5.09
percent) 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.
The complete results for February including interactive charts
detailing all data, are available at www.paychex.com/watch.
Highlights are available below.
National Jobs Index
- At 99.66, the pace of small business employment growth improved
in January (0.18 percent) and again in February (0.10 percent) to
begin 2023.
- The national index (99.66) is down 1.64 percent from the record
level set last February (101.33).
National Wage Report
- Hourly earnings growth slowed further to 4.49 percent in
February as one-month annualized growth remained below four percent
for the third consecutive month.
- Due to the positive momentum in weekly hours worked, weekly
earnings growth reached a new record level in February (5.09
percent) since reporting began in 2011.
- Reporting strong gains to start 2023, one-month annualized
weekly hours worked growth is averaging 2.76 percent in January and
February.
Regional Jobs Index
- The South leads regions in small business job growth for the
eleventh consecutive month, though its index was unchanged in
February at 100.82.
- At 99.86, the Midwest has had the strongest one-month change
rate among regions for the past three consecutive months. The
Midwest has gained 0.77 percent during the past quarter.
- The West ranked first among regions last February at 101.77,
but has fallen 2.88 percent during the past 12 months to 98.84 in
February 2023. The West has been
below 99 since October.
Regional Wage Report
- Hourly earnings growth is similar across the country, from a
low of 4.34 percent in the Midwest to a high of 4.75 percent in the
South.
- At 5.18 percent, the South leads weekly earnings growth among
regions for the 15th consecutive month.
- Weekly hours worked has accelerated during the past six months
in the Northeast; one-month annualized growth has averaged 2.09
percent since August 2022.
State Jobs Index
- North Carolina gained 0.37
percent in February to improve its index to 102.57. North Carolina has ranked first among states
since June 2022 and has had an index
above 102 since October 2021.
- Illinois (101.67) and
Tennessee (100.49) are the only
states with positive 12-month change rates, 1.60 percent and 1.37
percent, respectively.
- At 98.33, California ranks
last among states for the first time since the beginning of the
pandemic (March 2020). The
California small business jobs
index has decreased eleven times during the past 12 months.
State Wage Report
- Falling below six percent for the first time since April 2022, at 5.74 percent, Florida still leads states in hourly earnings
growth for the eighth straight month.
- Florida (6.34 percent),
Missouri (6.15 percent), and
Indiana (6.06 percent) lead states
with weekly earnings growth above six percent. Ten states have
growth above five percent and only one state has growth below four
percent.
- Virginia (2.98 percent) and
Michigan (3.53 percent) are the
only two states below four percent hourly earnings growth.
Metropolitan Jobs Index
- Houston (103.16) leads metros
in the rate of small business employment growth in February. The
next strongest metros, Chicago
(101.55), Atlanta (101.47), and
Phoenix (101.41), all trail
Houston by more than a point and a
half.
- Falling to 100.18 and ninth among metros, Dallas had the weakest one-month change rates
in both January (-1.23 percent) and February (-0.64 percent).
- The five weakest metro indexes are all located on the West
Coast, four metros in California
(San Diego, Riverside, San
Francisco, and Los
Angeles), and Seattle.
Metropolitan Wage Report
- At 6.08 percent, Miami
continues to lead metros in hourly earnings growth while slowing
consistently during the past several months.
- Weekly hours worked growth in Dallas (-1.16 percent) is last among metros
and has slowed precipitously in recent months. Dallas is the only metro with negative
one-month and three-month annualized growth rates, -2.33 percent
and -1.95 percent, respectively.
- The Washington metro ranks
last in both hourly earnings growth (3.46 percent) and weekly
earnings growth (3.91 percent).
Industry Jobs Index
- At 100.84, job growth in leisure and hospitality improved for
the fourth straight month and reported its largest one-month gain
(0.51 percent) since January
2022.
- Manufacturing (97.79) is down 2.60 percent from last year and
has been below 98 for the past six months.
- Other services (101.98) remains the top sector for small
business job growth in February, though the pace is 1.57 percent
slower compared to last year.
Industry Wage Report
- Leisure and hospitality ranks first among sectors in growth for
hourly earnings (6.83 percent), weekly earnings (9.20 percent), and
weekly hours worked (1.55 percent).
- Construction trails only leisure and hospitality in growth for
hourly earnings (5.11 percent), weekly earnings (5.98 percent), and
weekly hours worked (0.69 percent).
- Education and health services is the only sector with hourly
earnings growth below four percent (3.81 percent).
- With a spike in weekly hours worked, one-month annualized
weekly earnings growth reached double-digits in four of the eight
sectors analyzed (leisure and hospitality, other services,
construction, and trade, transportation, and utilities).
For more information about the Paychex | IHS Markit Small
Business Employment Watch, visit www.paychex.com/watch and sign up
to receive monthly Employment Watch alerts.
*Information regarding the professions included in the
industry data can be found at the Bureau of Labor Statistics
website.
About the Paychex | IHS Markit Small Business Employment
Watch
The Paychex | IHS Markit Small Business Employment
Watch is released each month by Paychex, Inc., a leading provider
of integrated human capital management software solutions for human
resources, payroll, benefits, and insurance services, and IHS
Markit, a world leader in critical information, analytics, and
expertise. Focused exclusively on small business 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. Drawing from the payroll data
of approximately 350,000 Paychex clients, this powerful tool
delivers real-time insights into the small business trends driving
the U.S. economy.
About Paychex
Paychex, Inc. (Nasdaq:PAYX) is a leading provider of integrated
human capital management solutions for human resources, payroll,
benefits, and insurance services. By combining innovative
software-as-a-service technology and mobility platform with
dedicated, personal service, Paychex empowers business owners to
focus on the growth and management of their business. Backed by 50
years of industry expertise, Paychex serves more than 730,000
payroll clients as of May 31, 2022 in
the U.S. and Europe, and pays one
out of every 12 American private sector employees. Learn more about
Paychex by visiting www.paychex.com and stay connected on
Twitter and LinkedIn.
About IHS Markit (www.ihsmarkit.com) IHS Markit
(NYSE: INFO) is a world leader in critical information, analytics
and solutions for the major industries and markets that drive
economies worldwide. The company delivers next-generation
information, analytics and solutions to customers in business,
finance and government, improving their operational efficiency and
providing deep insights that lead to well-informed, confident
decisions. IHS Markit has more than 50,000 business and government
customers, including 80 percent of the Fortune Global 500 and the
world's leading financial institutions. Headquartered in
London, IHS Markit is committed to
sustainable, profitable growth.
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rights reserved.
Media Contacts
Chris
Muller
Paychex, Inc.
+1 585-338-4346
cmuller@paychex.com
@Paychex
Kate Smith
IHS Markit
+1 781-301-9311
katherine.smith@ihsmarkit.com
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SOURCE Paychex, Inc.