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Paychex-IHS Markit Small Business Jobs Index declined to 98.59 in November 2023
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The rate of hourly earnings growth for workers at U.S. small businesses has slowed 17 of the past 18 months to 3.48% in November, falling below 3.50% for the first time since July 2021, according to the Paychex Small Business Employment Watch. Hiring at small businesses across the U.S. remains stable but continues to slow from the rate of growth seen at the start of 2023.
What November’s Report Means
“As we approach the end of 2023, wage growth continues to decline indicating that the actions taken by the Federal Reserve are having the desired effect,” said John Gibson, Paychex president and CEO. “Small business employers continue to add jobs at a more moderate pace than at the start of 2023 but still at a higher rate than pre-pandemic levels. Small businesses continue to show their resilience in the face of difficult capital markets and continued challenges in finding quality highly skilled labor.”
“November’s Small Business Employment Watch data highlights differing market conditions both geographically and by industry sector,” added Frank Fiorille, Paychex vice president of risk, compliance, and data analytics. “For instance, the Education and Health Services, as well as the Construction sector, have both experienced solid job growth throughout 2023. Leisure and Hospitality job growth continues to decline following a period of extensive recovery for the sector since 2020.”
Key Insights
- Slowing for 17 of the past 18 months, hourly earnings growth fell to 3.48% in November.
- The rate of small business job growth declined 0.18% to 98.59 in November.
- Hourly earnings growth in the Leisure and Hospitality sector has steadily slowed during the past two years, declining from 10.95% to 3.79% between January 2022 and November 2023.
- The South leads the pace of small business job growth among regions for the 20th consecutive month, with an index of 99.36, and was the only region to improve in November (0.10%).
- The Northeast (98.02) continues to rank last among regions and decreased 0.38% in November.
More Information
- Year-over-year weekly hours worked growth (-0.16%) remains negative, though three-month annualized growth climbed to 1.42% in November.
- The West leads regional hourly earnings growth for the sixth-straight month.
- Washington leads states for the fifth consecutive month in hourly earnings growth with a rate of 5.06%.
- Miami leads top U.S. metros in weekly hours worked growth (0.36%) for the seventh consecutive month.
- North Carolina remains the top state for small business job growth in November with an index of 100.68. Texas (100.17) ranks second.
- Houston (101.77) has now led top U.S. metros for small business job growth for a full year. Dallas (98.65) gained 0.84% in November alone, jumping from 18th to eighth among top metros.
- Education and Health Services (0.31%) and Construction (0.28%) have improved their small business employment growth rate.
- Leisure and Hospitality continues its sharp deceleration, dropping 0.56% in November to 97.71. The sector has slowed 3.65% since February (101.41).
Posted: December 5, 2023 Tuesday 08:30 AM