Employment growth had remained relatively stable for ten months prior to impact of COVID-19 accelerating in March
The latest Paychex | IHS Markit Small Business Employment Watch shows a slight decrease in both small business employment and wage growth in March. The report is based on data through March 19, a time when many businesses began to modify operations as a result of the COVID-19 outbreak. At 98.21, the jobs index slowed 0.11 percent from February and 0.57 percent year-over-year. Hourly earnings growth dipped to 2.68 percent ($0.72), while weekly earnings growth also decelerated to 3.08 percent.
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“With the reporting window closing on March 19, the Small Business Jobs Index was little changed in March, our last look before the full impact of coronavirus disruption,” said James Diffley, chief regional economist at IHS Markit.
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“While limited at this reading, we’re beginning to see the effects of the COVID-19 crisis impacting hours worked, hiring, and numbers of workers,” said Martin Mucci, Paychex president and CEO. “We’ve been impressed with the speed of the federal government in approving a number of measures to offer relief for small businesses and their employees through the Families First Coronavirus Relief Act, as well as the just-passed Coronavirus Aid, Relief, and Economic Security (CARES) Act. Paychex is actively involved in helping our clients navigate these new support systems and we encourage them to visit payx.me/covid19 for the latest.”
The March report shows several employment and wage growth factors that may be attributed to the COVID-19 pandemic:
- At 97.45, the West had the steepest employment growth decline in March, down 0.19 percent.
- Weekly hours worked growth in the West declined considerably in March as the one-month annualized growth rate fell 2.47 percent.
- Weekly hours worked growth fell sharply in Leisure and Hospitality in March, with the one-month annualized growth rate declining 6.58 percent.
- Down 0.39 percent, small business job growth in Leisure and Hospitality slowed most among industry sectors during the first quarter of 2020.
- Positive earnings growth momentum toward the end of 2019 has reversed during the first quarter of 2020.
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