The Paychex | IHS Markit Small Business Employment Watch Shows Hourly Earnings Growth at Its Highest Level Since 2011
The tight labor market continues to positively impact wage growth, according to the latest Paychex | IHS Markit Small Business Employment Watch. Hourly earnings grew 3.11 percent among employees of small businesses, the highest level since reporting began in 2011. Weekly earnings continue to grow, accelerating 3.75 percent in November. Essentially unchanged from the previous month, the national jobs index moderated 0.03 percent, remaining above 98.
“Wage increases are finally beginning to reflect the tight labor market for small businesses,” said James Diffley, chief regional economist at IHS Markit.
“Employers are responding to the challenges of the tight labor market,” said Martin Mucci, Paychex president and CEO. “We’ve seen a steady climb in hourly earnings growth, now reaching the highest levels in nearly a decade.”
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Broken down further, the November report showed:
- The South continues to lead regional small business employment growth; the West retained its lead among regions in wage growth.
- Tennessee remains the leader among states in small business job growth; New York leads states for wage growth.
- Dallas is again the top metro for small business job growth; three California metros, Los Angeles, San Francisco, and San Diego, lead the nation in hourly earnings growth.
- Leisure and Hospitality leads all other sectors in hourly earnings growth.
The complete results for November, including interactive charts detailing all data at a national, regional, state, metro, and industry level. Highlights are available below.
National Jobs Index
- Essentially unchanged in November, the Paychex | IHS Markit Small Business Jobs Index moderated 0.03 percent as the index continues to trend just above 98.
- Up 0.10 percent during the past quarter, the national index has a positive three-month growth rate for the first time since March 2017.
National Wage Report
- At 3.11 percent, hourly earnings growth is at its highest level since reporting began in 2011.
- Weekly earnings growth continues to accelerate in 2019, reaching 3.75 percent in November.
- Weekly hours worked are up 0.76 percent, the largest increase since May 2015.
Regional Jobs Index
- At 98.93, the South continues to lead regional small business employment growth.
- The Midwest (-1.51 percent) and the West (-1.30 percent) have the weakest 12-month growth rates among regions.
Regional Wage Report
- The West (3.67 percent) and Northeast (3.41 percent) far outpace the South (2.50 percent) and Midwest (2.62 percent) in hourly earnings growth.
- The West and Northeast have three-month annualized hourly earnings growth over four percent as gains have accelerated in both regions during the past quarter.
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State Jobs Index
- At 100.50, Tennessee leads small business employment growth and is the only state with an index above 100.
- Missouri and Washington fell below 97 and are now at the bottom of the state rankings with significant declines in November.
State Wage Report
- New York leads states in hourly earnings growth (4.39 percent), with three-month annualized growth above five percent.
- In the West, California leads hourly earnings growth (4.24 percent), while Arizona (2.11 percent) has slowed significantly this year.
- Texas and Indiana have the weakest hourly earnings gains among states, with less than two percent growth from a year ago.
Metropolitan Jobs Index
- Dallas continues to lead small business employment growth among metros despite a slight decline in November, which brought its index to 100.44.
- Up 0.91 percent in November, Tampa surged to second best among metros at 99.53.
- San Francisco and Houston also had significant increases, improving the ranking of both metros in November.
Metropolitan Wage Report
- Three California metros, Los Angeles, San Francisco, and San Diego, lead the nation in hourly earnings growth with rates above four percent.
- Tampa, Minneapolis, and Houston lag in hourly earnings growth, failing to exceed two percent.
Industry Jobs Index
- There was little change in employment growth rates among industries in November, though all sectors are now below 100.
- Manufacturing and Trade, Transportation, and Utilities had the strongest gains from the previous month but remain below 97.
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