Paychex | IHS Markit Small Business Employment Watch: Small Business Employment Growth Remains Level; Wages Continue to Gain Momentum

ROCHESTER, N.Y., Aug. 29, 2017 /PRNewswire/ -- The Paychex | IHS Markit Small Business Employment Watch shows a slowdown in small business job growth for the sixth consecutive month in August, while hourly earnings continue to gain momentum. The Small Business Jobs Index stands at 99.96, but the monthly decline in August was minimal at only 0.02 percent. Small business wages continue to rise, reaching a 3.00 percent ($0.76) annual growth rate in August and a 3.27 percent three-month annualized growth rate. National hourly earnings in August were $25.98, an $0.07 increase from July.

"There was little change in August, signifying the index's dip below 100 in July was not a fluke," said James Diffley, chief regional economist at IHS Markit. "Earnings continued to accelerate, with the growth rate now up 3.00 percent from a year ago."

"In reaching 3.00 percent, wage growth hit an important milestone this month," said Martin Mucci, Paychex president and CEO. "The combination of steadily rising wages and relatively consistent job growth are indicators of a healthy small business sector, especially in a year when small business owners are uncertain about potential policy changes and their business implications."

National Jobs Index

• At 99.96, the national index declined for the sixth consecutive month and is 0.74 percent lower than a year ago.
• Down 0.38 percent during the past quarter, the month-to-month decreases are getting smaller as the national index is leveling off.

National Wage Report

• At $25.98, hourly earnings continue to gain momentum as year-over-year growth reached 3.00 percent in August.
• At 3.27 percent, the three-month annualized growth rate remains ahead of the annual rate, slowing slightly from a high of 3.53 percent in May.

Regional Jobs Index

• Declining 0.19 percent from July, the Northeast had the biggest slowdown among regions, with most of the decline occurring in the Middle Atlantic.
• The Midwest has the best one-month and 12-month growth rates and is the only region to average stronger employment growth in 2017 year-to-date than during 2016.

Regional Wage Report  

• Hourly earnings in the West grew 3.65 percent year-over-year, best among regions, followed by 2.97 percent growth in the Northeast.
• With positive annual growth in weekly hours worked, the Midwest and Northeast both have weekly earnings growth of more than three percent.

State Jobs Index

• Ranked first among states last November with an index level of 103.47, small business employment growth in Georgia has quickly decreased to 100.25 in August.
• Trending near the bottom of the state rankings throughout 2017, New York slowed 0.37 percent in August to 99.05, a seven-year low.

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

State Wage Report

• Arizona leads states with hourly earnings growth of 5.24 percent, followed by California and New York at 3.83 percent and 3.74 percent, respectively.
• Missouri ranked last among states in hourly earnings growth for the first five months of 2017, but has quickly picked up the pace to 2.67 percent, with a three-month annualized growth rate of more than four percent.

Metropolitan Jobs Index  

• Dallas small business jobs growth increased 0.60 percent in August to 102.23, widening its lead as the top-ranked metro.
• Small business employment growth has steadily improved during the past year in Philadelphia, increasing 1.19 percent and moving up 13 spots to the second-ranked metro index at 101.29.

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

Metropolitan Wage Report

• The Southwestern metros of Phoenix, Riverside, and San Diego lead wage gains by a substantial margin, each above four percent year-over-year.
• At 3.11 percent last August, Chicago has seen hourly earnings growth decrease to 2.10 percent during the past year.

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

Industry Jobs Index

• Industry sectors showed little movement as employment growth conditions were relatively unchanged in August.
• Slowly declining, Financial Activities fell below 100 late in 2015 and is now below 99 for the second consecutive month.

Note: Analysis is provided for seven major industry sectors.

Industry Wage Report  

• Up 4.27 percent year-over-year, hourly earnings growth in Leisure and Hospitality has slowed during the past year, but remains one of the fastest paced sectors.
• Lagging all sectors for nearly three years, weekly earnings growth in Education and Health Services improved to 2.78 percent, just above Financial Activities at 2.75 percent.

Note: Analysis is provided for seven major industry sectors.

For more information about the Paychex | IHS Markit Small Business Employment Watch, including interactive charts detailing all data at a national, regional, state, metro, and industry level, visit https://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, HR, retirement, 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 45 years of industry expertise, Paychex serves approximately 605,000 payroll clients as of May 31, 2017 across more than 100 locations 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 IHS Markit (www.ihsmarkit.com)
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and expertise 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 key business and government customers, including 85 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 © 2017 IHS Markit Ltd. All rights reserved.

Media Contacts

Lisa Fleming
Paychex, Inc.
585-387-6402
[email protected]
@PaychexNews

Kate Smith
IHS Markit
781-301-9311
[email protected]

Tess Alberts
Eric Mower + Associates
716-880-1488
[email protected]

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SOURCE Paychex, Inc.

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