Weekly Earnings Growth Continues to Increase as Jobs Growth Holds Steady
The Paychex | IHS Markit Small Business Employment Watch shows renewed stability in employment growth and continuous increases in weekly earnings growth over the past quarter
Paychex | IHS Markit Small Business Employment Watch reflects a continuation of the tight labor market to start 2020. Weekly earnings growth improved for the 13th consecutive month, reaching 3.59 percent in January. Weekly hours worked were up 0.83 percent from last year, contributing to the growth in weekly earnings. The pace of small business employment growth remains consistent, with the national jobs index increasing slightly (0.01 percent) in January to 98.18.
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“The national index has been flat since mid-year 2019, signaling a continued tight labor market for small businesses,” said James Diffley, chief regional economist at IHS Markit.
“With election season heating up and the economy top of mind for business owners, this month’s Small Business Employment Watch demonstrates the continuing stability of jobs growth recently, as well as weekly earnings improvement,” said Martin Mucci, Paychex president and CEO. “The data shows consistent employment growth and yet another month of encouraging wage growth, two key indicators that the economy is off to a solid start in 2020.”
Broken down further, the January report showed:
- The South continues to top regions for small business employment growth; the West remains the leading region for hourly earnings growth.
- Tennessee ranks first among states in small business job growth; New York leads in hourly earnings growth.
- Phoenix became the top metro for small business job growth; San Francisco leads metros in hourly earnings growth.
- At 5.12 percent, Leisure and Hospitality leads hourly earnings growth among industry sectors.
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National Jobs Index
- The decline seen in small business employment growth during the first half of 2019 has given way to hiring stability over the past two quarters.
- Up a modest 0.01 percent in January, the national index continues to show very little change in job gains.
- At 98.18, the Paychex | IHS Markit Small Business Jobs Index is up 0.04 percent during the past quarter, but down 0.76 percent from last year.
National Wage Report
- Weekly earnings growth reached 3.59 percent, improving for the 13th straight month.
- At 2.89 percent, hourly earnings growth dipped below the three percent mark to begin 2020.
- Weekly hours worked are up 0.83 percent from last year.
Regional Jobs Index
- Above 98, the Northeast is reporting positive year-over-year growth for the first time in nearly three years. Strong performance in the Leisure and Hospitality sector is a contributor to that growth, up 2.60 percent since last year in the Northeast.
- Led by California, the West fell sharply in January (down 0.69 percent), and is now the weakest region for small business job gains.
- At 99.13, the South is the strongest region for job gains, up 0.26 percent in January.
Regional Wage Report
- The West leads in hourly earnings and hours worked growth, with weekly earnings accelerating for the 12th consecutive month to 4.35 percent in January.
- Due to an increase in hours worked, weekly earnings are on the rise in the Midwest, up to 2.81 percent this January compared to 1.97 percent in January 2019.
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