Small business job growth remains above pre-pandemic levels
Small business hourly earnings growth over the past 12 months declined again in April to 4.52 percent according to the Paychex | IHS Markit Small Business Employment Watch. After increasing every month in 2023, the Small Business Jobs Index, which measures the change in national employment growth for businesses with less than 50 employees, declined slightly by 0.24 percent from March and now stands at 99.49 in April.
“While the jobs index dropped in April, we are still experiencing a rate of growth that is better than pre-pandemic levels,” said James Diffley, chief regional economist, S&P Global Market Intelligence.
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“Our April data shows wage growth is slowing, signaling that the Fed’s efforts to pull back inflation are succeeding,” said John Gibson, Paychex president and CEO. “Small business owners continue to successfully navigate a variety of macro issues including the cost of and access to capital, historically low labor participation rates, and the transition of the workforce to Generation Z.”
Today, Paychex also released a new supplemental Small Business Employment Watch report, focused on the emerging role of Generation Z, the only generation in the workforce that is currently showing growth. Gen Z (born 1997-2012) recently surpassed Baby Boomers (born 1946-1964) as a percentage of the small business workforce.
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In further detail, the April Employment Watch report showed:
- Representing the first slowdown in small business job growth of 2023, the national index decreased 0.24 percent in April.
- The rate of small business job growth slowed in all regions in April with the West slowing the most (0.30 percent) to 98.73.
- Weekly hours-worked growth was down 0.11 percent from a year ago, making April the first month with a negative result in 2023.
- The South led all regions in small business employment growth for the 13th consecutive month and remained the only region with an index above 100.
- North Carolina remained the top state for small business job growth; Florida was once again the top state for hourly earnings growth.
- Dallas continues to lead U.S. metros in small business job growth and hourly earnings growth.
- Texas, Florida, Wisconsin, and Tennessee all had hourly earnings growth above five percent, outpacing the national average of 4.52 percent.
- Hourly earnings growth in construction (5.32 percent) reached a record high in April, and the sector ranked first for hourly earnings, weekly earnings, and weekly hours-worked growth.
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.
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