The latest Paychex | IHS Markit Small Business Employment Watch shows that employment growth improved slightly in May, up 0.25 percent, as stay-at-home orders eased in most states. Amid the economic impacts of the COVID-19 pandemic, the jobs index has fallen 3.95 percent year-over-year, most of which (3.52 percent) occurred in the past quarter. The transition back to work also resulted in a 5.33 percent one-month annualized increase in weekly hours worked after a sharp drop in April.
“May’s results hint that the small business job market quickly hit its bottom with the extraordinary job loss in April,” said James Diffley, chief regional economist at IHS Markit.
“While there are still many unknowns with the pace of recovery, the slight increase in employment numbers last month indicates that employers are starting to bring back employees who were furloughed or temporarily laid off during pandemic-related business closures,” said Martin Mucci, Paychex president and CEO. “Funds received from the Paycheck Protection Program have been helpful in supporting some businesses to retain employees and an extension of the SBA’s loan forgiveness timeline and different parameters would be a positive next step in flexibility to support business survival and recovery.”
Methodology Note: Payroll data used to calculate the Small Business Jobs Index includes employers that have temporarily suspended operations but have kept employees active (yet unpaid) on their payroll records. If the national index was reflective of only workers currently being paid, it would result in a lower jobs index level for the month of May.
The report also includes regional, state, metro, and industry level analysis, showing:
- All regions in the U.S. experienced improvement in May. However, the increase in the Northeast was marginal, up 0.01 percent.
- With Florida’s stay-at-home order lifted on May 4, the state’s jobs index is more than one point higher than any other state.
- Of the 20 metros analyzed, 14 showed improvement in May, only six slowed further.
- Up 1.22 percent to 97.73, Construction reported significant recovery in May and becomes the new top-ranked industry index.
The complete results for May, including interactive charts detailing all data at a national, regional, state, metro, and industry level, are available at www.paychex.com/employment-watch. Highlights are available below.