Small Business Employment Gains Continue, Especially in Leisure and Hospitality

Rhea-AI Summary

On June 29, 2021, Paychex reported a 0.26% increase in small business employment growth for June, with a 4.53% rise in the second quarter. The leisure and hospitality sectors saw notable gains, increasing 12.65% quarter-over-quarter. The national jobs index reached 98.52, while hourly earnings grew slightly to 2.84%. All US regions experienced job growth, with the South leading in small business job recovery. The report reflects positive momentum in the labor market as businesses re-open following the pandemic.

Positive

• Small business employment growth rose 0.26% in June 2021.
• The Small Business Jobs Index increased 4.53% in Q2 2021.
• Leisure and hospitality sector gained 12.65% in employment during Q2.
• Hourly earnings growth rose to 2.84% from 2.82% in May.
• All four US regions experienced job growth in June.

Negative

• Weekly earnings growth slowed more than 1% due to reduced hours worked.
• Construction sector employment decreased by 0.63% in June, continuing a downward trend.

ROCHESTER, N.Y., June 29, 2021 /PRNewswire/ -- Despite the competitive hiring environment, small business employment growth grew 0.26 percent in June, according to aggregated payroll data of approximately 350,000 clients provided by Paychex. The data released in the latest report of the Paychex | IHS Markit Small Business Employment Watch shows momentum in job growth with the Small Business Jobs Index gaining 4.53 percent during the second quarter of 2021 (in part driven by the 2020 comparison period). Hiring is particularly strong in the leisure and hospitality sector, which gained 12.65 percent in the past quarter. Hourly earnings growth increased slightly, from 2.82 percent in May to 2.84 percent in June.

"With re-openings across the country, the leisure and hospitality jobs index regained its pre-pandemic level," said James Diffley, chief regional economist at IHS Markit.

"Following a year marked by lower employment rates, there was a notable uptick in small business jobs growth in June and throughout the second quarter. In fact, all four regions of the country experienced an increase in employment last month," said Martin Mucci, Paychex president and CEO.

In further detail, the June report showed:

• The national index gained 0.26 percent to 98.52 in June and 4.53 percent during the second quarter of 2021.
• Employment growth in the leisure and hospitality sector increased 1.22 percent in June and 12.65 percent during the second quarter of 2021.
• Wages are also on the rise in leisure and hospitality. The sector ranks highest in hourly earnings and hours worked growth, with weekly earnings growth up double digits.
• The South continues to lead all regions in small business job growth.
• Job growth in North Carolina spiked 6.36 percent during the second quarter.
• Tampa once again leads all metros job growth.

Paychex business solutions reach 1 in 12 American private-sector employees, making the Small Business Jobs Index report an industry benchmark. The national jobs index uses a 12-month same-store methodology to gauge small business employment trends on a national, regional, state, metro, and industry basis.

The complete results for June, including interactive charts detailing all data, are available at www.paychex.com/watch. Highlights are available below. 

National Jobs Index

• The national index gained 0.26 percent to 98.52 in June and 4.53 percent during the second quarter of 2021.
• At 98.52, the jobs index has trended above 98 since April when the lower prior year employee average comparison created a base effect.

National Wage Report

• Hourly earnings growth ticked up slightly, from 2.82 percent in May to 2.84 percent in June.
• Weekly earnings growth has slowed more than one percent during the past two months due to a reduction in weekly hours worked.

Regional Jobs Index

• All four regions saw employment growth gains in June. The top-ranked region, the South, gained the least (0.05 percent). The lowest-ranked region, the Northeast, gained the most (0.45 percent).
• At 99.43, the South remained the strongest region for small business job growth, more than one point above the next highest region, the West (98.25).

Regional Wage Report

• Hourly earnings growth in the West was 3.18 percent, strongest among regions.
• Hourly earnings growth in the Northeast slowed to 2.93 percent in June.

State Jobs Index

• North Carolina has spiked 6.36 percent during the second quarter of 2021, best among states, improving its rank from 10th to 3rd.
• The bottom two states last month, Washington and Virginia, had two of the top three largest increases this month.

Note: Analysis is provided for the 20 largest states based on U.S. population.

State Wage Report

• Missouri (4.09 percent), led states in hourly earnings growth again in June, followed by Massachusetts (3.57 percent) and California (3.54 percent).
• Illinois ranks last among states in hourly earnings growth (1.70 percent) and weekly earnings growth (0.85 percent).
• Georgia remains the top state for weekly earnings growth (3.96 percent).
  

Note: Analysis is provided for the 20 largest states based on U.S. population.

Metropolitan Jobs Index 

• Tampa continues to lead all metros at 101.60, despite a 0.61 percent decrease in May and 0.52 percent decrease in June.
• Three of the four lowest ranked metros, San Francisco, Washington, DC., and Seattle, saw the largest increases in June.

Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Metropolitan Wage Report

• Two California metros, Riverside and Los Angeles, lead earnings growth among metros.
• Thirteen metros have hourly earnings growth below three percent.
• Seattle ranks first among metros in weekly hours worked growth, 1.44 percent.
• Due to a reduction in hours worked year-over-year, three metros have weekly earnings growth below one percent (Minneapolis, Detroit, and Baltimore).

Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Industry Jobs Index

• Leisure and hospitality gained 12.65 percent during the second quarter of 2021. Its index now ranks third among sectors.
• Construction had the largest decrease among sectors again in June (0.63 percent). This follows a decline in May of 1.78 percent.

Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The other services (except 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 ranked first among sectors for earnings and hours worked growth, with weekly earnings growth up double digits.
• Other services continues to lead in employment growth; due to an influx of part-time employees. However, the sector is lowest both in hourly earnings and hours worked growth.

Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The other services (except 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/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 50 years of industry expertise, Paychex serves more than 710,000 payroll clients as of May 31, 2021 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 © 2021 IHS Markit Ltd. All rights reserved.

Media Contacts

Lisa Fleming
Paychex, Inc.
+1 585-387-6402
lfleming@paychex.com 
@Paychex 

Kate Smith
IHS Markit
+1 781-301-9311
katherine.smith@ihsmarkit.com 

Melissa Mazurek
Mower
+1 585-389-1809
mmazurek@mower.com  

 

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SOURCE Paychex, Inc.

FAQ

What is the small business employment growth reported by Paychex for June 2021?

Paychex reported a 0.26% increase in small business employment growth for June 2021.

How much did the Small Business Jobs Index increase in Q2 2021?

The Small Business Jobs Index increased by 4.53% during the second quarter of 2021.

Which sector saw the highest employment growth according to Paychex's June report?

The leisure and hospitality sector experienced the highest employment growth, increasing 12.65% in Q2 2021.

What was the hourly earnings growth in June 2021?

Hourly earnings growth rose to 2.84% in June 2021, slightly up from 2.82% in May.

How did the South perform in small business job growth according to the report?

The South continued to lead all regions in small business job growth in June 2021.