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Employment growth in small businesses slows in July; Growth in hourly earnings slows slightly

By on August 2, 2022 0

ROCHESTER, NY, August 2, 2022 /PRNewswire/ — Hiring at U.S. small businesses slowed for the fifth consecutive month, according to the latest Paychex | IHS Markit Small Business Employment Watch. The Small Business Employment Index moderated -0.66% from the previous month and sits at 100.14. The pace of wage increases slowed slightly compared to the previous month, with average hourly wage growth of 5.08% compared to 5.13% in June 2022.

“As national GDP flattens, the small business jobs index also slowed significantly in July,” said James Diffley, Chief Regional Economist at IHS Markit. “With an index level above 100, we see continued job growth, but the pace of that growth has slowed.”

“For nearly two years, companies have been hiring staff at a rapid pace to make up for losses incurred during the pandemic,” said Martin Mucci, CEO of Paychex. “Although the growth rate has slowed, additional analysis of our customer base indicates that the demand for workers continues to be robust while the shortage of available candidates is slowing the overall employment growth rate.”

In more detail, the July report showed:

  • The employment index in all regions fell in July, with the West slowing the most (-0.81%).
  • At 100.67, the South continues to be the strongest region for small business employment growth.
  • North Carolina is the new top state for job growth; Florida is the new leading state for hourly earnings growth.
  • dallas continues to lead America’s metropolises in small business employment growth and worker hourly earnings growth.
  • Other services (excluding public administration) remained the top sector for employment growth in July at 103.11.

Paychex Solutions reach 1 in 12 US private sector employees, making the Small Business Employment Watch an industry benchmark. Drawing on payroll data from approximately 350,000 Paychex customers with fewer than 50 employees, the monthly report offers analysis of national employment and wage trends, as well as a review of regional, state, and business activity. , metropolitan and sectoral.

Full July results, including interactive charts detailing all the data, are available at www.paychex.com/watch. Highlights are available below.

National Job Index

  • The national index fell in July, down 0.66% from the previous month.
  • The small business employment growth rate slowed for the fifth straight month, falling from 101.33 in February to 100.14 in July.

National salary report

  • At 5.08%, growth in hourly earnings moderated for the second month in a row.
  • Weekly earnings growth improved for the fifth consecutive month, rising from 3.95% in February to 4.62% in July.
  • Although negative (-0.35%) in July, growth in weekly hours worked improved this month, reaching its highest level since the start of the year.

Regional jobs index

  • All regions fell in July, with the West slowing the most (-0.81%).
  • At 100.67, the South leads the regional indexes for the fourth month in a row.
  • The West (99.84) and Midwest (99.67) both fell below 100 in July.

Note: The percentages displayed in the regional heatmap reflect changes over 12 months.

Regional Salary Report

  • At 5.59%, hourly wage growth in the South has increased over the past 15e consecutive month. Additionally, the South leads in weekly earnings and employment growth.
  • For the third consecutive month, the Northeast was the only region with hourly revenue growth below 5% (4.53%) and weekly revenue growth below 4% (3.92%).

Note: The percentages displayed in the regional heatmap reflect changes over 12 months.

State Jobs Index

  • At 102.68, North Carolina leads the states by a wide margin.
  • Tennessee (0.20%) and Arizona (0.08%) were the only state indices to improve in July.
  • Four states (Wisconsin, Indiana, Missouriand Massachusetts) each fell 1% in July.

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

State Salary Report

  • Florida ranked first among states for hourly earnings growth (6.34%) as well as weekly earnings growth (5.84%). However, Arizona, Ohioand Indiana weren’t far behind as each had hourly earnings growth above 6%.
  • Virginia was the only state with hourly earnings growth of less than 4%.
  • None of the 20 states analyzed saw growth in weekly hours worked.

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

Metropolitan Jobs Index

  • At 104.02, dallas continued to dominate the metros despite having the second largest
    decrease over one month (-1.34%).
  • Another one Texas subway, Houstonplaced second at 101.97 and was one of only two metros (Houston and Phoenix) to improve its index level in July.
  • California is home to the three lowest-ranked metros: San Francisco, Riversideand San Diego. San Francisco slowed by 1.60% in July, the largest drop, and is again the lowest-ranked metropolis (98.49).

Note: Analysis is provided for the 20 largest metropolitan areas based on population in the United States.

Metropolitan Salary Report

  • dallas led metros in hourly revenue growth (7.30%), increasing for the 22n/a consecutive month. However dallas also led employment growth by a wide margin, with its weekly hours worked growth (-1.25%) ranking last among metros.
  • Tampa (6.30%), followed by dallas (6.19%) and Miami (6.13%), topped weekly revenue growth among metros in July.
  • Houston (0.28%) and Tampa (0.10%) were the only two metropolises to have recorded positive growth in weekly hours worked.

Note: Analysis is provided for the 20 largest metropolitan areas based on population in the United States.

Industry jobs index

  • At 103.11, other services (excluding public administration) remain the leading sector for July.
  • Down 1.99% to 101.14, leisure and hospitality posted the steepest decline among the sectors for the sixth month in a row.

Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The other services industry category (except public administration) includes religious, civic and social organizations, as well as personal services, including auto and household repair, salons, dry cleaners and other businesses.

Industry Salary Report

  • At 7.15%, other services (excluding public administration) led the growth in hourly earnings among industries. One- and three-month annualized growth was also above 7%.
  • Growth in hourly earnings (6.28%) in leisure and hospitality slowed for the sixth consecutive month. One-month annualized hourly earnings fell to 1.78%.
  • Construction was the only sector to show positive growth in weekly hours worked (0.38%). Leisure and hotels are in last place (-1.64%).

Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The other services industry category (except public administration) includes religious, civic and social organizations, as well as personal services, including auto and household repair, salons, dry cleaners and other businesses.

For more information on Paychex | IHS Markit Small Business Employment Watch, visit www.paychex.com/watch and Register to receive monthly Employment Watch alerts.

*Information regarding the occupations included in the industry data can be found on the Bureau of Labor Statistics website.

About Paychex | IHS Markit Small Business Employment Watch

Paychex | IHS Markit Small Business Employment Watch is published monthly by Paychex, Inc., a leading provider of integrated human capital management software solutions for human resources, payroll, benefits and insurance departments, and IHS Markit , a global leader in critical information, analysis, and know-how. Focused exclusively on small businesses with fewer than 50 employees, the monthly report offers analysis of national employment and wage trends, as well as a review of regional, state, metro and industry activity. Drawing on payroll data from approximately 350,000 Paychex customers, this powerful tool provides real-time insight into small business trends driving the US 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 a mobility platform with personalized, dedicated service, Paychex allows business owners to focus on growing and running their business. With 50 years of industry expertise, Paychex serves more than 730,000 payroll customers from May 31, 2022 in the United States and Europeand pays one in 12 US private sector employees. Learn more about Paychex by visiting paychex.com and stay connected on Twitter and LinkedIn.

IHS Markit (NYSE: INFO) is a global leader in critical information, analytics and solutions for key industries and markets that drive economies around the world. The company delivers next-generation insights, analytics and solutions to clients in business, finance and government, improving their operational efficiency and delivering deep insights that drive informed and confident decisions. IHS Markit has more than 50,000 commercial and government customers, including 80% of the Fortune Global 500 and major global financial institutions. Based at LondonIHS Markit is committed to sustainable and profitable growth.

IHS Markit is a registered trademark of IHS Markit Ltd. and/or its subsidiaries. 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
[email protected]
@Paychex

Catherine Smith
IHS Markit
+1 781-301-9311
[email protected]

SOURCEPaychex, Inc.