Small Business Jobs and Wages Increase Modestly in March
According to the Paychex | IHS Markit Small Business Employment Watch report, small business employment growth showed a modest increase of 0.06% in March 2023, raising the Small Business Jobs Index to 99.73. Average hourly earnings also rose slightly to 4.64%. The South remains the strongest region with an index of 100.68, despite a recent decline of -0.14%. While small business growth is resilient, potential risks persist due to recent banking disruptions affecting capital access. The report draws from payroll data of approximately 350,000 small business clients across the U.S.
- Small business jobs index increased by 0.06% to 99.73 in March 2023.
- Average hourly earnings increased to 4.64%.
- National Jobs Index down 1.55% from a year ago.
- First decrease in the South's index (-0.14%) since September 2022.
ROCHESTER, N.Y., April 4, 2023 /PRNewswire/ -- Small business employment has grown consistently during the first quarter of 2023, according to the Paychex | IHS Markit Small Business Employment Watch. The Small Business Jobs Index, which measures employment growth, increased modestly (
"The small business economy continues to demonstrate durability with the jobs index advancing each month this year along with moderate wage gains," said James Diffley, chief regional economist, S&P Global Market Intelligence.
"The Main Street small- and mid-sized business owners continued to show their resiliency in the first quarter of 2023," said John Gibson, Paychex CEO. "This is an encouraging start to the year and policymakers are going to need to carefully consider their next actions as the full impact of the recent banking disruptions on SMB's access to capital is still not fully understood."
In further detail, the March report showed:
- Following several months of moderation, national hourly earnings growth increased slightly to 4.64 percent in March as one-month annualized growth reached 5.34 percent.
- The national jobs index has risen for three consecutive months, with the South's growth—the only region with an index above 100—continuing to lead the country.
- Weekly hours worked rose 0.21 percent YOY (to 32.63) while one-month annualized growth moderated for the first time since August 2022.
- The South led regions for the twelfth consecutive month and is the only region with an index above 100 (100.68). Still, the South reported its first decrease (-0.14 percent) since September 2022.
- Despite its job growth slowing by 0.42 percent, North Carolina's robust performance continued in March, with the state's index hitting 102.13.
- Illinois' growth rate rose 0.25 percent last month and 1.70 percent year-over-year. At 101.92 and second among states, Illinois' performance in March is the strongest it's seen since 2014.
- Small business employment growth remained strong in Houston (103.10), making the city the first among metros for the fifth consecutive month.
- Leisure and hospitality led sectors in jobs growth (101.32) and hourly earnings growth (5.96 percent).
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 March, including interactive charts detailing all data, are available at www.paychex.com/watch. Highlights are available below.
National Jobs Index
- At 99.73, the pace of small business employment growth increased 0.06 percent in March and 0.35 percent during the first quarter of 2023.
- Despite consecutive gains in the first three months of 2023, the national Index is down 1.55 percent from a year ago.
National Wage Report
- Following several months of moderation, national hourly earnings growth increased to 4.64 percent in March and one-month annualized growth reached 5.34 percent.
- At 32.63 hours, weekly hours worked were up year-over-year (0.21 percent), though one-month annualized growth dropped (0.03 percent) for the first time since August 2022.
Regional Jobs Index
- The South led regions for the twelfth consecutive month and is the only region with an index above 100 (100.68). Still, the South reported its first decrease (-0.14 percent) since September 2022.
- At 99.96, the Midwest ranked second among regions—as it has for the past two quarters—and its Index has increased for four consecutive months.
- March brought hints of a narrowing growth gap between regions, as the bottom-ranked West lead the country in gains (0.19 percent) and the top-ranked South lead in losses
(-0.14 percent).
Regional Wage Report
- The South led hourly earnings growth among regions (4.86 percent) for the eighth consecutive month.
- The Midwest ranked last among regions in hourly earnings growth (4.45 percent) and first in weekly hours-worked growth (0.52 percent).
- Hourly earnings growth in the West grew to 4.77 percent in March, as one-month annualized growth jumped to 6.24 percent—its highest level since 2019.
State Jobs Index
- North Carolina's growth rate slowed 0.42 percent in March to 102.13. However, the state continued its nine-month streak as the country's leader.
- Illinois' growth rate rose 0.25 percent last month and 1.70 percent YOY. At 101.92 and second among states, Illinois' performance in March is the strongest it's been since 2014.
- At 98.54, California ranked last among states but showed its largest one-month gain (0.22 percent) in more than a year.
Note: Analysis is provided for the 20 largest states based on U.S. population.
State Wage Report
- Florida ranked first among states for the ninth consecutive month despite its hourly earnings growth rate slowing to 5.56 percent in March.
- At 3.18 percent, Virginia remained last among states for hourly earnings growth, a trend that has persisted since June 2022.
- Missouri led overall growth among states for weekly earnings (6.04 percent) and weekly hours worked (0.93 percent).
Note: Analysis is provided for the 20 largest states based on U.S. population.
Metropolitan Jobs Index
- Small business employment growth remained strong in Houston (103.10), making the city the first among metros for the fifth consecutive month.
- Falling below 100 for the first time this year, the Dallas metro's Job Index dropped
5 percent YOY, falling from 105.12 to 99.86 between March 2022 and March 2023. - San Diego remains last among metros with its index dropping 4.02 percent YOY. At 97.66, it was the only state with an index below 98.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Metropolitan Wage Report
- Miami led metros in hourly (5.80 percent) and weekly (6.15 percent) earnings growth.
- San Francisco had the highest hourly earnings among metros (
$39.28) but the lowest growth rate (3.55 percent). - Philadelphia and nearby Baltimore lead metros in weekly hours-worked growth, 0.46 and 0.45 percent, respectively.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Industry Jobs Index
- Following four months of gains, leisure and hospitality's Job Index dropped to 101.32 in March, though it remained the top sector for small business employment growth.
- Manufacturing slowed 97.71 (a 0.16 percent drop) in March, maintaining its status as the weakest sector for the eighth consecutive month.
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 lead sectors in hourly earnings growth (5.96 percent) for the fifth straight month, despite falling below six percent for the first time since April 2021.
- Ranked second among sectors, construction reached a new record for hourly earnings growth, reaching 5.28 percent for the first time since reporting began in 2011.
- Hourly earnings growth for education and health services continued to rank last among sectors as it has for the past 18 months. The average growth rate during that period (3.77 percent) is in line with the current growth rate (3.78 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.
The Small Business Jobs Index methodology was updated with the March 2023 index published on April 4, 2023 to utilize the most up-to-date industry coding possible. The historical update is reflected in the March 2023 report and only affects the sectors reported within the "industry" dimension. For a full description of the report's updated methodology, read "Understanding the Jobs Index" on the Paychex website.
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 integrated human capital management software solutions for human resources, payroll, benefits, and insurance services, and S&P Global Market Intelligence, a Division of S&P Global (NYSE: SPGI), which merged with IHS Markit in 2022 and is a provider of information services and solutions to global markets. Focused exclusively on small businesses with fewer than 50 employees, the monthly report offers an 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 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.
About S&P Global Market Intelligence
At S&P Global Market Intelligence, we understand the importance of accurate, deep and insightful information. Our team of experts delivers unrivaled insights and leading data and technology solutions, partnering with customers to expand their perspective, operate with confidence, and make decisions with conviction.
S&P Global Market Intelligence is a division of S&P Global (NYSE: SPGI). S&P Global is the world's foremost provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help many of the world's leading organizations navigate the economic landscape so they can plan for tomorrow, today. For more information, visit www.spglobal.com/marketintelligence.
Media Contacts
Chris Muller
Paychex, Inc.
+1 585-338-4346
cmuller@paychex.com
@Paychex
Kate Smith
IHS Markit
+1 781-301-9311
katherine.smith@ihsmarkit.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/small-business-jobs-and-wages-increase-modestly-in-march-301789117.html
SOURCE Paychex, Inc.
FAQ
What does the Paychex March 2023 report indicate about small business employment?
How much did average hourly earnings change according to Paychex in March 2023?
Which region is leading in small business employment growth according to the report?
What is the significance of the banking disruptions mentioned in the report?
What is the ticker symbol for Paychex?
What company merged with IHS Markit in 2022?
