Job Gains in U.S. Small Businesses Continue in June

Rhea-AI Summary

The latest Paychex Small Business Employment Watch reveals that U.S. small businesses continued adding jobs in June, albeit slower than in May. Small business hourly earnings growth remained steady at 3.16% for the month.

The national jobs index for June was 100.29, indicating employment gains but at a slower rate compared to May's 100.58 and June 2023's 101.37. The state of California has seen a three-month consecutive decline below 100, indicating job losses, with the Leisure and Hospitality sector particularly affected. Conversely, Education and Health Services, along with Professional and Business Services, saw an uptick in small business employment growth.

Weekly earnings growth improved for the third straight month, albeit marginally, at 2.96%. However, challenges such as complex regulations, a tight labor market, and inflationary pressures continue to impact certain regions and industries.

Positive

• Hourly earnings growth for small business workers held steady at 3.16% in June.
• The national jobs index indicates employment gains at 100.29.
• Education and Health Services, and Professional and Business Services sectors saw employment growth in June.
• Weekly earnings growth improved for the third consecutive month, now at 2.96%.

Negative

• Employment growth slowed in June compared to May and June 2023.
• California saw a decline in the jobs index for three months, indicating job losses.
• Leisure and Hospitality sector in California experienced a 2.70 percentage point slowdown over the last quarter.
• Weekly hours worked in the Leisure and Hospitality sector in California decreased by 1.77% last month.

Hourly earnings growth for small business workers holds steady

ROCHESTER, N.Y.--(BUSINESS WIRE)-- According to the Paychex Small Business Employment Watch, U.S. employers with fewer than 50 employees continued to add jobs in June, though at a slower pace than in May. Hourly earnings growth for small business workers held steady at 3.16% in June.

U.S. small businesses continued to add jobs in June, though at a slower pace than May, while wage growth held steady. (Graphic: Business Wire)

“Small businesses continued to add jobs across the country in June and there was little change in wage inflation, which reflects relative stability for small businesses,” said John Gibson, Paychex president and CEO. “The trends in our wage data over the first half of 2024 are also signaling steady hourly earnings growth heading into the second half of the year.”

“While jobs are growing nationally, small businesses in some geographies and industries continue to face a challenging operating environment due to complex regulations, a tight labor market, and inflationary pressures,” Gibson added. “We are continuing to see the impact of these challenges in the West region, particularly in the state of California, which came in last among states for job growth in June. At the same time, our customers are telling us they are being more selective in the hiring process and searching for candidates who will boost their culture and bottom line.”

Jobs Index and Wage Data Highlights:

• The national jobs index continued to represent employment gains in June (100.29), though at a slower pace than May (100.58) and June 2023 (101.37).
• National hourly earnings growth held steady at 3.16% in June, consistent with the moderating trend reported during the first half of 2024.
• One- and three-month annualized hourly earnings growth reported 3.04% and 2.85% in June, respectively, slightly below the 12-month growth rate (3.16%).
• California (99.37) dropped to last among states in June and has reported an index level below 100 for three-straight months, indicating year-over-year job losses. Leisure and Hospitality ranked last among sectors analyzed in California in June, slowing 2.70 percentage points over the last quarter. Weekly hours worked growth in Leisure and Hospitality across the state was down 1.77% last month.
• The two largest industry sectors, Education and Health Services (102.18) and Professional and Business Services (100.20), increased their rate of small business employment growth from last month in June.
• Weekly earnings growth (2.96%) improved for the third consecutive month, though the increases have been marginal (0.03%).

The complete Small Business Employment Watch results for June 2024, including interactive charts detailing the data at a national, regional, state, metro, and industry sector level are available at www.paychex.com/watch. Learn more and sign up to receive monthly Employment Watch alerts.

About the Paychex Small Business Employment Watch

The Paychex Small Business Employment Watch is released each month by Paychex, Inc. Focused exclusively on businesses with fewer than 50 workers, the monthly report offers analysis of national employment and wage trends and examines regional, state, metro, and industry sector activity. Drawing from the payroll data of approximately 350,000 Paychex clients, this powerful industry benchmark delivers real-time insights into the small business trends driving the U.S. economy. The jobs index is scaled to 100, which represents no year-over-year change in job growth among same store businesses. Index values above 100 represent new jobs being added, while values below 100 represent jobs being lost.

About Paychex

Paychex, Inc. (Nasdaq: PAYX) is an industry-leading HCM company delivering a full suite of technology and advisory services in human resources, employee benefit solutions, insurance, and payroll. The company serves over 745,000 customers in the U.S. and Europe and pays one out of every 12 American private sector employees. The more than 16,000 people at Paychex are committed to helping businesses succeed and building thriving communities where they work and live. Visit paychex.com to learn more.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240702353654/en/

Media Contacts

Tracy Volkmann

Paychex, Inc.

Manager, Public Relations

(585) 387-6705

tvolkman@paychex.com

@Paychex

Source: Paychex, Inc.

FAQ

What was the hourly earnings growth for small businesses in June 2024?

The hourly earnings growth for small businesses in June 2024 was 3.16%.

Did small businesses continue to add jobs in June 2024?

Yes, U.S. small businesses continued to add jobs in June 2024, but at a slower pace compared to May.

What was the national jobs index for June 2024?

The national jobs index for June 2024 was 100.29.

Which state reported job losses for small businesses in June 2024?

California reported job losses for small businesses in June 2024 with an index level below 100 for three consecutive months.

Which sectors saw employment growth in June 2024?

The Education and Health Services, and Professional and Business Services sectors saw an increase in small business employment growth in June 2024.

What challenges did small businesses face in June 2024?

Small businesses faced challenges such as complex regulations, a tight labor market, and inflationary pressures in June 2024.