While government workers across the nation regain some footing after the longest government shutdown in history, small business are reporting positive numbers in light of this tough employment situation.
According to the latest Paychex | IHS Markit Small Business Employment Watch there a 0.04 increase in small business job growth and a 0.07 increase in hourly earnings growth for the month of January
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% in January to 98.92, though it remains down 0.96 year-over-year.
At 2.49% ($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 2% as weekly hours worked have declined.
“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—in a press release announcing the findings. “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, Texas remains first among metros in job growth; Riverside, California is once again the top metro for wage growth.
- With a 0.14% increase in January, the construction industry is back above 100 and ranks second among industries in jobs growth.
Additional highlights of the job report are listed below:
National Jobs Index
- At 98.92, the steady decline in the jobs index halted this month, as January saw a slight increase (0.04%).
- The national index remained below 99 in January and is down 0.96% year-over-year.
National Wage Report
- At 2.49% in January, hourly earnings growth has improved each month since August. However, growth is lower than the January 2018 rate of 2.76%.
- With a reduction in weekly hours worked, weekly earnings growth has declined below 2%.
Regional Jobs Index
- Dipping below 98 in January, the Northeast fell 1.72% during the past year, further increasing the gap with the rest of the country.
- The West began 2019 with the best 1-month growth rate among regions, 0.18%, taking over the top spot at 99.49.
Regional Wage Report
- Though negative across all regions in January, the recent downtrend in weekly hours worked growth is stabilizing.
- At 3.28%, the West remains by far the strongest region for hourly earnings growth, though a decrease in weekly hours worked has pulled weekly earnings growth below 3%.
State Jobs Index
- At 100.41, Wisconsin remains the top state for small business employment growth for the third consecutive month.
- With an index below 97, small business employment growth in New Jersey has slowed considerably, down 2.50% in the last 3 months.
Note: Analysis is provided for the 20 largest states based on U.S. population.
State Wage Report
- After 23 months as the leading state for hourly earnings growth, Arizona slipped to second as California now ranks first among states, up 3.44%.
- Indiana ranks last among states in both earnings and hours worked growth.
Note: Analysis is provided for the 20 largest states based on U.S. population.
Metropolitan Jobs Index
- Dallas ranks first among metros for the third consecutive month, surging to 102.94 in January.
- The New York metro had a significant decrease in January, joining Northeast metros Philadelphia and Boston with an index below 98.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Metropolitan Wage Report
- Riverside, California; Phoenix, Arizona; and Denver, Colorado are the metro pace setters for hourly earnings growth, with California metros Los Angeles and San Diego rounding out the top five.
- Though very low at 1.21%, Houston’s hourly earnings growth trend has turned upwards after a long decline.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Industry Jobs Index
- With a 0.14% increase in January, Construction is back above 100 and ranks second among industries.
- Finance fell below 98 in January, joining Manufacturing at the bottom of the industry rankings.
Note: Analysis is provided for seven major industry sectors.
Industry Wage Report
- At $16.96/hour, Leisure and Hospitality is the lowest wage sector, but has the fastest growth, 4.10%.
- Consistently among the weakest sectors for hourly earnings growth, Education and Health Services has been below 2% for the past 6 months.