The Paychex | IHS Markit Small Business Employment Watch shows small business job growth was essentially unchanged in April; Hourly earnings growth for workers continues to moderate slightly
The Paychex | IHS Markit Small Business Employment Watch for April shows job and wage growth kept pace with recent months. In the first four months of 2019 job growth has remained relatively consistent, slowing just 0.03 percent per month to 98.77 in April. Annualized hourly earnings growth in the last quarter was 2.78 percent, higher than April’s rate of 2.50 percent ($0.66).
“While weak, the rate of small business hiring has been consistent, with the national index slightly below 99 for the fifth consecutive month,” said James Diffley, chief regional economist at IHS Markit.
“We’re encouraged to see the rate of small business job growth holding steady, but finding qualified candidates remains a significant challenge for small businesses,” said Martin Mucci, Paychex president and CEO. “According to a recent survey we conducted, to help address the labor skills gap, a majority of small business leaders say they’re willing to consider hiring underqualified candidates who could then be trained on the job.”
Broken down further by geography and industry, the April report showed:
- The South continues to lead regions in employment growth; the West remains the top region for hourly earnings growth exceeding three percent.
- Texas remains the strongest state for small business job growth; Missouri took first place among states for wage growth.
- Dallas is again the top metro for job growth; San Diego continues to lead metros for wage growth.
- Education and Health Services has increased its pace of small business employment growth in each month of 2019.
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The complete results for April, including interactive charts detailing all data at a national, regional, state, metro, and industry level.
Highlights are available below.
National Jobs Index
- At 98.77, the national index was essentially unchanged from the previous month (-0.02 percent) and is down 0.77 percent from last year.
- Small business employment growth has held pace throughout the first four months of 2019, slowing just 0.03 percent per month.
National Wage Report
- Hourly earnings growth continues to moderate slightly, now at 2.50 percent. However, the last quarter has shown 2.78 percent annualized growth.
- One-month and three-month annualized growth rates for weekly earnings are above three percent for the first time in more than a year.
Regional Jobs Index
- With Texas, Tennessee, and Georgia among the top five states, the South leads all regions in small business employment growth (99.60).
- Though the Northeast continues to trend below other regions, the Northeast had its first positive month in more than a year, gaining 0.08 percent.
Regional Wage Report
- Hourly earnings growth in the West has exceeded three percent since 2015, while the other regions remain below 2.50 percent.
- Due to increases in weekly hours worked, weekly earnings growth in the Northeast (2.51 percent) outpaces the West (2.41 percent).
- At 2.45 percent in April, weekly earnings growth has quickly improved in the South during 2019.
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State Jobs Index
- Improving to 97.81, Massachusetts gained 0.39 percent from the previous month, its best one-month result since 2015.
- After increasing 0.61 percent during the first quarter of 2019, Arizona lost its momentum, slowing 0.52 percent in April.
Note: Analysis is provided for the 20 largest states based on U.S. population.
State Wage Report
- Missouri, California, New York, and Arizona are the only states above three percent in hourly earnings growth in April.
- Wage growth in Arizona has been decelerating since the beginning of 2018.
Note: Analysis is provided for the 20 largest states based on U.S. population.
Metropolitan Jobs Index
- Seattle surged to third-ranked metro for small business employment growth, behind Dallas and Tampa, with an index slightly below 101 and a positive 12-month growth rate.
- Slowing to 100.35, Phoenix suffered the largest one-month decline among metros, down 0.58 percent.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Metropolitan Wage Report
- San Diego and Riverside lead metros with annual hourly earnings gains above four percent.
- San Diego has a three-month annualized growth rate near six percent.
- Houston and Tampa trail metros with less than one and a half percent hourly earnings growth from a year ago.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Industry Jobs Index
- With its best one month gain in nearly three years, the index for Construction surpassed 100, up 0.31 percent from the previous month.
- Education and Health Services has increased its pace of small business employment growth in each month of 2019 and has a positive 12-month growth rate for the first time in more than two years.
Note: Analysis is provided for seven major industry sectors.
Industry Wage Report
- Leisure and Hospitality has lead industry sectors in hourly earnings growth since the beginning of 2018 and is accelerating in 2019, with 4.46 percent growth in April.
- Manufacturing; Trade, Transportation, and Utilities; and Construction are also above three percent hourly earnings growth in April.
Note: Analysis is provided for seven major industry sectors.
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