The Paychex | IHS Markit Small Business Employment Watch showed its first job growth decrease of 2019 in March. After remaining relatively flat in January and February, the Small Business Jobs Index declined 0.15 percent to 98.78. However, despite a 0.88 percent slowdown year-over-year, the first calendar quarter of 2019 represents the strongest quarter in the past year. Hourly earnings growth moderated slightly to 2.52 percent ($0.66) in March, while annualized one-month and three-month growth rates were closer to three percent.

“After two flat months to start 2019, the national index resumed its decline in March to 98.78” said James Diffley, chief regional economist at IHS Markit.

“The challenges of hiring in the tight labor market continued in March as small business job growth declined,” said Martin Mucci, Paychex president and CEO. “As our latest Business Sentiment Report indicates, business owners’ optimism about their ability to fill open positions with qualified candidates remains low."

Broken down further by geography and industry, the March report showed:

- The South continues to lead regions in employment growth; the West remains the top region for hourly earnings growth by nearly a full percent.
- Texas remained the strongest state for small business job growth; California is once again the top state for wage growth.
- Dallas took the top spot among metros in job growth; San Diego took the lead among metros for wage growth.
- Though it remains one of the strongest sectors for small business employment growth, Construction fell below 100 for just the second time in more than seven years.

The Paychex | IHS Markit Small Business Employment Watch shows small business job growth slowed in March, while hourly earnings growth for workers remained stable. Small Business Hiring Declines in March; Wage Growth Remains Steady