Small Business Hiring and Worker Wages Hold Steady
In November, Paychex reported stable job and hourly earnings growth at U.S. small businesses, with the Small Business Jobs Index declining minimally to 99.38. Hourly earnings growth remained steady at 5.04%, while three-month annualized weekly hours worked growth reached 0.77%, the highest since March 2021. The southern U.S. leads in job growth, with North Carolina noted for job growth, and Missouri for hourly earnings. However, Florida experienced declines, likely due to Hurricane Ian. The report highlights the challenges businesses face from inflation and labor market conditions.
- Hourly earnings growth steady at 5.04%.
- Three-month annualized weekly hours worked growth at 0.77%, highest since March 2021.
- South leads in job growth with North Carolina topping state rankings.
- Small Business Jobs Index slightly down by 0.05%.
- Florida's weekly hours worked growth down by 0.79% due to Hurricane Ian.
Paychex data also reveals the growth in three-month annualized weekly hours worked
has reached its highest level since March 2021
ROCHESTER, N.Y., Nov. 29, 2022 /PRNewswire/ -- The rate of job growth and hourly earnings growth held relatively steady at U.S. small businesses in November, according to the latest Paychex | IHS Markit Small Business Employment Watch. The Small Business Jobs Index moderated slightly -0.05 percent from the previous month and stands at 99.38. At 5.04 percent, the pace of hourly earnings growth was unchanged over the previous month.
"While there was little to no change in hiring rates and hourly earnings growth in November, this month's data reveals interesting trends in hours worked. One-month annualized weekly hours worked growth was positive for the third consecutive month, increasing 0.50 percent, possibly signaling that small businesses are adapting to the current labor market and are leveraging existing staff," said James Diffley, chief regional economist at IHS Markit.
"As U.S. businesses approach the end of the year, they're continuing to contend with inflation pressures and a challenging labor market," said John Gibson, Paychex president and CEO. "They should remember government programs are available to help, including the Employee Retention Tax Credit, which could be a source of significant support."
In further detail, the November report showed:
- At 99.38, the national jobs index moderated -0.05 percent from last month (-0.05 percent is the smallest one-month decrease since March 2022).
- Three-month annualized weekly hours worked growth reached its highest level since March 2021, increasing to 0.77 percent in November.
- After eight consecutive increases, weekly earnings growth slowed slightly to 4.84 percent.
- Leisure and hospitality ranks first among sectors in hourly earnings growth (6.38 percent) and last in weekly hours worked growth (-0.66 percent).
- The South continues to lead U.S. regions in small business job growth and hourly earnings growth for workers.
- North Carolina remained the top state for small business job growth; Missouri replaced Florida as the top state for worker hourly earnings growth.
- Houston overtook Dallas to lead U.S. metros in small business job growth; Dallas and Miami are the top metros for hourly earnings growth (6.69 percent).
- Likely an impact from Hurricane Ian, weekly hours worked growth is down -0.79 percent in Florida and -0.98 percent in Tampa, the lowest level among U.S. states and metros, respectively.
Paychex solutions reach 1 in 12 American private-sector employees, making the Small Business Employment Watch an industry benchmark. Drawing from the payroll data of approximately 350,000 Paychex clients with fewer than 50 employees, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro, and industry sector activity.
The complete results for November, including interactive charts detailing all data, are available at www.paychex.com/watch. Highlights are available below.
- At 99.38, the national jobs index declined 0.05 percent from last month and 1.32 percent from last year.
- The national index slowed for the ninth consecutive month, from 101.33 in February 2022 to 99.38 in November 2022.
- At 5.04 percent in November, hourly earnings growth was unchanged compared to last month.
- After eight consecutive increases, weekly earnings growth slowed slightly to 4.84 percent.
- Three-month annualized weekly hours worked growth reached its highest level since March 2021, increasing to 0.77 percent in November.
- The South leads regional job growth for the eighth straight month. At 100.64, it is more than one and half points higher than the next highest region, the Northeast.
- The pace of small business job growth is weakest in the West region in November (98.73). After 12 consecutive gains from March 2021 through February 2022, the rate of increase in the West has slowed the past nine months.
- The South leads hourly earnings growth among regions at 5.50 percent in November. While the South has been consistently top ranked for jobs and earnings growth among regions for several months, weekly hours worked growth (-0.44 percent) has steadily slowed and ranks last in November.
- Hourly earnings growth in the Northeast has been above four percent, but also ranked last among regions for the past 13 months.
- North Carolina (102.40) leads among states for the fourth consecutive month. However, North Carolina's index is down from a year ago (-0.07 percent), the state's first decline since March 2021.
- Georgia had the best one-month gain (0.63 percent) among states in November as its index (100.52) jumped back above 100.
- Washington joined Ohio and Wisconsin at the bottom of the state rankings with an index below 98 in November. Down 3.56 percent from a year ago, Washington has the weakest 12-month change rate among states, though nearly all of the losses have occurred in the past six months (-3.50 percent).
Note: Analysis is provided for the 20 largest states based on U.S. population.
- Missouri (6.58 percent) leads states in hourly earnings growth, followed by Florida and Texas, which also have growth above six percent.
- At 3.62 percent, Virginia is the only state with hourly earnings growth below four percent and ranks last for the sixth consecutive month.
- Ten states have hourly earnings growth below five percent, while ten states have growth above five percent in November.
- Likely an impact from Hurricane Ian, weekly hours worked growth is down -0.79 percent in Florida, the lowest level among states.
Note: Analysis is provided for the 20 largest states based on U.S. population.
- Overtaking Dallas, Houston now has the top-ranked metro index (102.94) for the first time in nearly ten years. Houston had the strongest one-month gain (0.49 percent) among metros, while Dallas had the weakest (-0.67 percent) falling to 102.73.
- Four West Coast metros (Seattle, San Diego, San Francisco, and Riverside) have indexes below 98 and are down more than three percent from last year.
- Following a sizable downturn during 2022 where its index fell from 103.15 in March to 99.58 in August, Atlanta has improved for three consecutive months and is back above 100 in November (100.36).
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
- Both reporting 6.69 percent, Dallas and Miami lead hourly earnings growth among metros in November. Tampa (6.29 percent) and Baltimore (6.27 percent) also have growth above six percent.
- While 12-month hourly earnings growth in Tampa has been above six percent since April, one-month annualized growth fell to its lowest level in two years (2.08 percent).
- Weekly hours worked growth in Tampa (-0.98 percent) remains last among metros in November.
- Washington (3.68 percent) and Detroit (3.96 percent) are the only metros with hourly earnings growth below four percent in November.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
- At 98.47, construction gained 0.37 percent in November, the best one-month change rate among industries and its best increase since April 2021.
- Other services remain the top-ranked sector in November at 101.96, despite its eighth consecutive decrease and lowest index level since July 2021.
- Leisure and hospitality improved 0.14 percent to 100.02 in November, its first one-month gain since January. Despite the positive movement, the sector is down 4.03 percent from its level a year ago.
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, dry cleaners, and other businesses. The chart's dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.
- Leisure and hospitality rank first among sectors in hourly earnings growth (6.38 percent) and last in weekly hours worked growth (-0.66 percent).
- Improving for the sixteenth consecutive month and ranked first for the ninth consecutive month, weekly hours worked growth in construction is up 0.32 percent from last year. Moreover, at 5.19 percent, hourly earnings growth in construction has been above five percent for the past six months.
- At 4.21 percent hourly earnings growth in November, education and health services reached a new record level since reporting began in 2011. Yet, its growth has been the weakest among sectors since October 2021.
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, dry cleaners, 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.
The Paychex | IHS Markit Small Business Employment Watch is released each month by Paychex, Inc., a leading provider of integrated human capital management software solutions for human resources, payroll, benefits, and insurance services, and IHS Markit, a world leader in critical information, analytics, and expertise. Focused exclusively on small business with fewer than 50 employees, 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.
Paychex, Inc. (NASDAQ: PAYX) is a leading provider of integrated human capital management solutions for human resources, payroll, benefits, and insurance services. By combining innovative software-as-a-service technology and mobility platform with dedicated, personal service, Paychex empowers business owners to focus on the growth and management of their business. Backed by 50 years of industry expertise, Paychex serves more than 730,000 payroll clients as of May 31, 2022 in the U.S. and Europe, and pays one out of every 12 American private sector employees. Learn more about Paychex by visiting www.paychex.com and stay connected on Twitter and LinkedIn.
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.
Chris Muller
Paychex, Inc.
+1 585-338-4346
cmuller@paychex.com
@Paychex
Kate Smith
IHS Markit
+1 781-301-9311
katherine.smith@ihsmarkit.com
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SOURCE Paychex, Inc.
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