The latest Paychex | IHS Markit Small Business Employment Watch shows that employment growth moderated as new COVID-19 hot spots emerged in the South and West regions of the U.S. The national jobs index slipped 0.24 percent in July to 94.59. Hourly earnings growth also slowed slightly to 3.29 percent last month, but increasing hours worked, spurred by the shifting workforce composition, drove weekly earnings growth up to 4.14 percent, with one-month and three-month annualized growth rates topping five percent.
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“The jobs index fell slightly in July as a number of states were forced to backtrack on early reopenings,” said James Diffley, chief regional economist at IHS Markit.
“The rebound in small business job growth has slowed mostly in regions where there has been a recent surge in cases,” said Martin Mucci, Paychex president and CEO. “We’re closely monitoring the status of the next expected stimulus bill for additional relief measures that may be necessary for many small businesses in the months ahead.”
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The report also includes regional, state, metro, and industry level analysis, showing:
- The South and West reported the largest declines in employment growth, -0.31 percent and -0.33 percent, respectively.
- Despite slowing 0.44 percent in July, Florida continues as the top state for small business employment growth.
- Small business jobs growth in Seattle declined 1.89 percent in July as its index fell to 91.05, lowest among all U.S. metros.
- The Financial Activities industry sector, which includes financial services, insurance, and real estate, was the only sector to experience improved rates of small business employment growth in July and is ranked second behind Construction.