The latest Paychex | IHS Markit Business Employment Watch report is out. The January numbers show the national Small Business Jobs Index held relatively stable from the previous month, moderating slightly to 94.00 or 0.07 percent. Both the growth in earnings and hours worked are trending higher to begin the year following a six-month slowdown. Hourly earnings growth increased to 2.68 percent. Weekly earnings growth also increased to 2.84 percent as weekly hours worked rose 0.17 percent.
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“After December’s decline, the Small Business Jobs Index remained relatively flat in January,” said James Diffley, chief regional economist at IHS Markit.
“Led by a strong showing in construction, most industries experienced gains in January. This helped stabilize employment growth to begin the year,” said Martin Mucci, Paychex president and CEO. “The new round of Paycheck Protection Program loans will be especially important to businesses negatively impacted by COVID-19. Especially those in the hospitality sector where the maximum loan amount has been increased.”
The monthly report, widely considered an industry benchmark, draws payroll data of approximately 350,000 Paychex clients to gauge small business wage and employment trends on a national, regional, state, metro, and industry basis.
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In further detail, the January report showed:
- Five of the eight industry sectors analyzed experienced job growth in January.
- Losses were concentrated in leisure and hospitality, which declined 0.63 percent from the previous month.
- Job growth was most robust in the construction industry, which increased 0.34 percent.
- California climbed four spots in the state rankings, spurred by the construction industry, and saw its best one-month increase in eleven years.
- The South leads in small business job growth, more than a point ahead of all other regions.
- Florida, Texas, and Tennessee are the only states with jobs index levels above 96.
- Following a six-month slowdown, both the growth in earnings and hours worked are trending higher.
- 15 of the 20 states analyzed have positive year-over-year weekly hours worked growth.
The complete results for January, including interactive charts detailing all data at a national, regional, state, metro, and industry level, are available at www.paychex.com/watch. Highlights are available below.