Key Indicators of Small Business Employment Show Stability Amid Recent Surge in COVID-19 Cases Across the U.S.
The latest Paychex | IHS Markit Small Business Employment Watch indicates a slight decline in small business hiring, dropping 0.03% to 94.29 nationally. Hourly earnings growth is reported at 2.76%, while weekly hours worked decreased by 0.04% year-over-year. The report highlights that the South leads in employment growth, and Texas ranks first among states in job growth. The national jobs index has remained flat since April, indicating potential stagnation amid ongoing pandemic challenges.
- Hourly earnings growth at 2.76% indicates continued wage strength.
- The South region shows strong employment growth, remaining a leader.
- Texas ranks first in job growth, climbing steadily in recent months.
- National jobs index at 94.29 represents a new low for the second consecutive month.
- Weekly hours worked growth turned negative for the first time since May.
- Overall job index decreased by 3.89% year-over-year.
ROCHESTER, N.Y., Dec. 1, 2020 /PRNewswire/ -- The latest Paychex |IHS Markit Small Business Employment Watch shows that small business hiring remained largely consistent with the prior month, moderating slightly, down 0.03 percent nationally to 94.29. In November, hourly earnings growth stood at 2.76 percent, while weekly hours worked showed a decrease of 0.04 percent year over year.
"The Index has been essentially flat since August, showing no signs of immediate recovery," said James Diffley, chief regional economist at IHS Markit.
"As the pandemic reaches yet another peak in the U.S., both employment and wage growth have remained relatively steady over the past quarter," said Martin Mucci, Paychex president and CEO. "Despite the recent surge, small businesses across the U.S. continue to show resiliency, validating other key metrics we monitor that have been showing similar trends."
The report also includes regional, state, metro, and industry level analysis, showing:
- The South remains the top-ranked region for employment growth, a full one point above the next highest region.
- The Northeast is the only region with weekly earnings growth above three percent.
- Texas has climbed one spot in the rankings each month for the past quarter, now ranking first among states in job growth.
- Construction leads all industries in job growth for the seventh consecutive month.
- Leisure and Hospitality lags with the weakest index for the past eight months.
The complete results for November, including interactive charts detailing all data at a national, regional, state, metro, and industry level, are available at www.paychex.com/employment-watch. Highlights are available below.
Note: Data presented for the month of November was collected from Friday, October 16 through Thursday, November 19, the cutoff date for the Small Business Employment Watch.
National Jobs Index
- Since dropping below 95 in April, the national index has moderated between 94 and 95 for the past seven months.
- At 94.29, the Small Business Jobs Index slowed 0.03 percent in November and 3.89 percent from last year.
- The national index reached a new low for the second consecutive month.
National Wage Report
- Hourly earnings growth slowed for the fifth consecutive month, from a peak of 3.29 percent in June to 2.76 percent in November.
- At -0.04 percent in November, weekly hours worked growth turned negative for the first time since May; one-month and three-month annualized growth were both down more than one percent for the second consecutive month.
- Weekly earnings reported growth below three percent for the first time since September 2019.
Regional Jobs Index
- There was very little movement across the four major regions in November, as each edged down very slightly.
- At 95.62, the South remains the top-ranked region and is one point above the next highest region, the Midwest (94.62).
- The West remains the lowest-ranked region for the third consecutive month, reaching a new historic low for the fourth consecutive month.
Regional Wage Report
- The Northeast is the only region with weekly earnings growth above three percent, though it has quickly slowed from a June peak of 7.35 percent.
- Earnings and hours worked growth is weakest in the South.
- Hourly earnings growth has slowed for 12 consecutive months in the West, from 3.41 percent last November to 2.63 percent this November.
State Jobs Index
- Texas gained 0.63 percent in November, moving ahead of Florida for the top-ranked state index at 96.73; Texas has climbed one spot in the rankings each month for the past quarter, gaining 1.01 percent.
- Though Washington is the weakest state index for the fifth straight month, it has improved 0.71 percent during the past quarter.
- Virginia fell 1.69 percent and in November, pulling its index down nine spots among states to 93.70.
Note: Analysis is provided for the 20 largest states based on U.S. population.
State Wage Report
- New Jersey, Massachusetts, and Pennsylvania lead hourly earnings growth among states, all above four percent, though one-month and three-month annualized growth rates are signaling a slowdown.
- Florida and Georgia have the weakest weekly hours worked growth among states, both down more than one percent year-over-year.
- With hourly earnings growth up one percent and weekly hours worked growth down one percent, weekly earnings growth in Texas is just 0.01 percent, last among states.
Note: Analysis is provided for the 20 largest states based on U.S. population.
Metropolitan Jobs Index
- The gap in metro performance shrunk in November as top-ranked Denver declined 0.80 percent and lowest-ranked Seattle increased 1.05 percent.
- Dallas spiked 1.05 percent to 97.22, while Houston moderated -0.08 percent with an index level of 95.39.
- Baltimore recovered 1.15 percent this past month as its index is now down just 1.28 percent from last year.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Metropolitan Wage Report
- With hourly earnings growth of 5.88 percent, Riverside tops the metro rankings for the sixth straight month; Riverside weekly hours worked growth ranks second as well.
- Three metros have hourly earnings growth above four percent, while three metros have hourly earnings growth below two percent.
- Tampa remains in the middle of the pack for earnings and hours worked growth among metros, though one-month annualized growth for both dropped considerably in November, signaling weakening conditions.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Industry Jobs Index
- There was little change among industries in November; Construction leads all industries for the seventh consecutive month, while Leisure and Hospitality lags with the weakest index for the past eight months.
- Six of the eight industry sectors are above the national index level (94.29) as Manufacturing (92.73) and Leisure and Hospitality (88.14) are pulling down the national level of small business employment growth.
Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The Other Services (excluding Public Administration) industry category includes religious, civic, and social organizations, as well as personal services, including automotive and household repair, salons, drycleaners, and other businesses.
Industry Wage Report
- Leisure and Hospitality ranks first among sectors in hourly earnings growth (4.15 percent) and last in weekly hours worked growth (-2.44 percent).
- At 3.76 percent, Construction leads in weekly earnings growth among sectors and is the only sector with one-month and three-month growth above three percent.
- Unlike other sectors, Financial Activities did not experience a significant disruption in weekly hours worked as growth has been steadily positive and consistent during 2020.
Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The Other Services (excluding Public Administration) industry category includes religious, civic, and social organizations, as well as personal services, including automotive and household repair, salons, drycleaners, and other businesses.
For more information about the Paychex | IHS Markit Small Business Employment Watch, visit www.paychex.com/employment-watch and sign up to receive monthly Employment Watch alerts.
*Information regarding the professions included in the industry data can be found at the Bureau of Labor Statistics website.
About the Paychex | IHS Markit Small Business Employment Watch
The Paychex | IHS Markit Small Business Employment Watch is released each month by Paychex, Inc., a leading provider of payroll, human resource, insurance, and benefits outsourcing solutions for small-to medium-sized businesses, and IHS Markit, a world leader in critical information, analytics, and expertise. Focused exclusively on small business, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro, and industry sector activity. Drawing from the payroll data of approximately 350,000 Paychex clients, this powerful tool delivers real-time insights into the small business trends driving the U.S. economy.
About Paychex
Paychex, Inc. (NASDAQ:PAYX) is a leading provider of integrated human capital management solutions for payroll, benefits, human resources, and insurance services. By combining its innovative software-as-a-service technology and mobility platform with dedicated, personal service, Paychex empowers small- and medium-sized business owners to focus on the growth and management of their business. Backed by more than 45 years of industry expertise, Paychex served more than 680,000 payroll clients as of May 31, 2020 across more than 100 locations in the U.S. and Europe, and pays one out of every 12 American private sector employees. Learn more about Paychex by visiting paychex.com and stay connected on Twitter and LinkedIn.
About IHS Markit (www.ihsmarkit.com)
IHS Markit (NYSE: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world's leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.
IHS Markit is a registered trademark of IHS Markit Ltd. and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2020 IHS Markit Ltd. All rights reserved.
Media Contacts
Lisa Fleming
Paychex, Inc.
+1 585-387-6402
lfleming@paychex.com
@PaychexNews
Kate Smith
IHS Markit
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katherine.smith@ihsmarkit.com
Colleen Bennis
Mower
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SOURCE Paychex, Inc.
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