Paychex | IHS Markit Small Business Employment Watch: Small Business Job Growth and Wages Moderate in February

Paychex | IHS Markit Small Business Employment Watch: Small Business Job Growth and Wages Moderate in February

- The Small Business Jobs Index decreased 0.11 percent to 99.77 in February

- At $26.41, 12-month hourly earnings growth decreased from 2.74 percent in January to 2.67 percent in February; Weekly hours continued positive YOY growth for the 15th straight month

- South leads regions in employment growth; West ranks highest for wage growth

- Washington State ranks first in job growth; Arizona remains first in hourly earnings growth

- Seattle overtakes Denver as the top metro for small business job growth; Phoenix leads in small business wage growth

- Above 100 for six years, Construction shows sustained small business employment growth; Leisure and Hospitality has the strongest hourly earnings growth

ROCHESTER, N.Y., March 6, 2018 /PRNewswire/ -- After an uptick to start the year, the Paychex | IHS Markit Small Business Employment Watch saw small declines in jobs and wage growth in February. The Small Business Jobs Index stands at 99.77, down 0.11 percent from January and one percent below last year. The index has been below 100 since July 2017. Hourly earnings increased $0.69 in the past year to $26.41, but February's 12-month growth rate fell to 2.67 percent compared to 2.74 percent the previous month. Weekly earnings growth has also slipped below three percent during the past quarter.

"After a prolonged downturn, the Paychex | IHS Markit Small Business Jobs Index has stabilized at just below 100, a marginal decline in small business dynamism from a decade and a half ago," said James Diffley, chief regional economist at IHS Markit.

"The results of the Small Business Jobs Index over the past year are evidence of the tightening labor market," said Martin Mucci, Paychex president and CEO. "As the growth in jobs stabilizes because of challenges in finding qualified employees, we expect to see business owners making positive changes to wages and benefits to recruit and retain top quality talent."

National Jobs Index

    --  At 99.77, the Paychex | IHS Markit Small Business Jobs Index is down
        1.00 percent from last year.
    --  February marks the eighth consecutive month the national index has been
        below 100.

National Wage Report

    --  Hourly earnings growth turned lower in February, decelerating to 2.67
        percent.
    --  Weekly earnings growth trended above three percent from April to
        November, but has slipped below three percent during the past quarter.
    --  Weekly hours have seen positive growth year-over-year for 15 straight
        months.

Regional Jobs Index

    --  At 100.34, the South ranks first among regions for the 22(nd)
        consecutive month and is the only region above 100.
    --  The Northeast ranks third among regions, but has the best one-month and
        12-month growth rates.

Regional Wage Report

    --  Averaging $27.52/hour and up 3.23 percent year-over-year, the West
        remains the leading region for wage growth.
    --  Weekly earnings growth in the Midwest peaked at 3.21 percent last
        February, but has since decelerated, reaching 2.17 percent this
        February.

State Jobs Index

    --  At 102.36, Washington regained its position as the top state for small
        business employment growth, with a healthy February gain of 0.65
        percent.
    --  On the East Coast, at 100.56, North Carolina improved sizably for the
        third straight month and jumped to fourth place among states.
    --  Sixteen of 20 states have a negative 12-month growth rate as the
        tightening small business labor market is widespread among states.

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

State Wage Report

    --  Arizona remains the top state for hourly earnings growth, 4.67 percent,
        but has slowed to start 2018. One-month and three-month annualized
        growth rates are both 4.00 percent.
    --  At 3.11 percent, hourly earnings growth in Missouri has improved
        considerably, following an average of less than two percent growth
        during the past two years.

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

Metropolitan Jobs Index

    --  With the best one-month growth rate among metros, 0.88 percent, Seattle
        displaced Denver as the top-ranked metro for small business employment
        growth.
    --  Among the slowest-growing metros, San Francisco (98.44) gained 0.65
        percent in February, switching places with Los Angeles (97.60). Los
        Angeles now ranks last among metros for the first time in the history of
        the Small Business Jobs Index.

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

Metropolitan Wage Report

    --  The Western metros continue to far outpace the rest of the country for
        earnings growth.
    --  At 1.55 percent hourly earnings growth, Boston's deceleration is the
        most severe, extending back to 2016.

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

Industry Jobs Index

    --  At 100.38, Construction is up for the quarter and has been above 100 for
        the past six years, signifying steady small business employment growth.
    --  Financial Activities had its worst month in more than ten years,
        decreasing 0.60 percent and falling to the slowest-growing industry
        sector.

Note: Analysis is provided for seven major industry sectors.

Industry Wage Report

    --  Leisure and Hospitality has the strongest hourly earnings growth among
        industries, gaining 3.79 percent year-over-year.
    --  While most sectors are slowing, wage gains in Construction and Financial
        Activities are accelerating.
    --  Pairing solid hourly earnings and weekly hours worked growth, Trade,
        Transportation, and Utilities has the best wage growth among sectors,
        4.06 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 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 solutions 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 business and government customers, including 80 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 © 2018 IHS Markit Ltd. All rights reserved.

Media Contacts

Lisa Fleming
Paychex, Inc.
585-387-6402
lfleming@paychex.com
@PaychexNews

Kate Smith
IHS Markit
781-301-9311
Katherine.smith@ihsmarkit.com

Tess Flynn
Eric Mower + Associates
716-880-1488
tflynn@mower.com

View original content with multimedia:http://www.prnewswire.com/news-releases/paychex--ihs-markit-small-business-employment-watch-small-business-job-growth-and-wages-moderate-in-february-300608722.html

SOURCE Paychex, Inc.