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Small Business Hiring and Wage Growth Hold Steady in May

Press Release from Paychex Inc.

ROCHESTER, N.Y., June 4, 2019 /PRNewswire/ -- The Paychex | IHS Markit Small Business Employment Watch for May shows job and wage growth were essentially unchanged from the previous month. The national jobs index stands at 98.76 and has been relatively stable throughout 2019. Hourly earnings have increased 2.53 percent ($0.67) over the past 12 months, remaining slightly ahead of the 2018 average growth rate (2.49 percent).

The Paychex | IHS Markit Small Business Employment Watch for May shows job and wage growth were essentially unchanged from the previous month. The national jobs index stands at 98.76 and has been relatively stable throughout 2019. Hourly earnings have increased 2.53 percent ($0.67) over the past 12 months, remaining slightly ahead of the 2018 average growth rate (2.49 percent).

"At 98.76, the national index has stabilized in 2019, though at a level indicating little expansion by small businesses," said James Diffley, chief regional economist at IHS Markit.

"Flat job growth this year suggests that small businesses are struggling to compete with larger companies for talent," said Martin Mucci, Paychex president and CEO. "According to our most recent research report, one way that employers can stand out to prospective hires is by focusing on employees' desire for flexibility in when, where, and how they work."

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

  • The South continues to lead regions in employment growth; the West remains the top region for hourly earnings growth.
  • Tennessee holds the top spot among states for small business job growth; Illinois took first place among states for wage growth.
  • Dallas is again the top metro for job growth; San Diego continues to lead metros for wage growth.
  • Manufacturing is the only industry with weekly earnings growth above four percent.

The complete results for May, including interactive charts detailing all data at a national, regional, state, metro, and industry level, are available at www.paychex.com/employment-watch. Highlights are available below.

National Jobs Index

  • Although down 0.85 from a year ago, the national index has been flat throughout much of 2019.
  • At 98.76, the national index was essentially unchanged during the past two months (-0.02 percent in April and 0.00 percent in May).

National Wage Report

  • Hourly earnings are up 2.53 percent from a year ago, remaining marginally ahead of the 2018 average, 2.49 percent.
  • Hovering slightly above two percent, weekly earnings growth has moderated among small business employees in 2019 as minimum wage increases appear to have been combatted with decreases in weekly hours worked.

Regional Jobs Index

  • The South is the only region with an index above 99 and has led small business employment growth for 36 of the last 37 months.
  • At 98.06, the Northeast has risen above 98 for the first time in 2019 and reported consecutive increases for the first time in more than a year.

Regional Wage Report

  • The West leads all regions in hourly earnings growth at $28.65/hour and 3.11 percent year-over-year growth, bolstering the national average.
  • Despite the West leading with 3.11 percent hourly earnings growth, it is the only region to see a month-over-month slowdown.

State Jobs Index

  • Tennessee, Texas, Georgia, and Arizona all have indexes exceeding 100 and positive 12-month growth rates.
  • Middle Atlantic states New Jersey and New York are once again ranked last among states in small business growth.

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

State Wage Report

  • Hourly earnings growth in Illinois surged to 3.51 percent in May, best among states and at its fastest pace since reporting began in 2011. At $29.62, the hourly rate in Illinois is exceeded only by Washington, Massachusetts, and Virginia.
  • At 3.28 percent, hourly earnings growth in California has been consistent for the past two years, trending between 3.27 percent and 3.52 percent.

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

Metropolitan Jobs Index

  • At 103.65, Dallas leads metros by a wide margin, gaining 3.40 percent in the past year.
  • Reporting strong small business growth, Dallas, Tampa Bay, Atlanta, Denver, Phoenix, and Seattle exceed 100.
  • Riverside and San Diego fell significantly in May, joining New York City among the metro areas with the lowest index levels.

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

Metropolitan Wage Report

  • Chicago and three California metros (San Diego, Los Angeles, and Riverside) are the strongest metro areas for hourly earnings growth in May.
  • Washington, San Francisco, Seattle, Boston, and Denver also exceed three percent hourly earnings growth.
  • Houston and Dallas have reported hourly earnings growth below two percent for the past year.

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

Industry Jobs Index

  • Manufacturing has fallen 2.19 percent from last year and is the lowest performing sector at 96.92.
  • Moving ahead of Construction, now ranking second among all industries, Education and Health Services gained 0.05 percent in May, its fifth consecutive gain.

Note: Analysis is provided for seven major industry sectors.

Industry Wage Report

  • The strong hourly earnings gains in Leisure and Hospitality (4.59 percent), are being minimalized by a significant decrease in weekly hours worked (down 1.70 percent).
  • Manufacturing is the only industry with weekly earnings growth above four percent.

Note: Analysis is provided for seven major industry sectors.

For more information about the Paychex | IHS Markit Small Business Employment Watch, 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, benefits, human resources, 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 more than 45 years of industry expertise, Paychex serves over 650,000 payroll clients as of May 31, 2018, across more than 100 locations in the U.S. and Europe, 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 © 2019 IHS Markit Ltd. All rights reserved.

Media Contacts

Lisa Fleming
Paychex, Inc.
+1 585-387-6402
lfleming@paychex.com
@PaychexNews

Kate Smith
IHS Markit
+1 781-301-9311
katherine.smith@ihsmarkit.com

Tess Flynn
Mower
+1 716-880-1488
tflynn@mower.com

At 98.76, the national index was essentially unchanged during the past two months (-0.02 percent in April and 0.00 percent in May).

Hourly earnings are up 2.53 percent from a year ago, remaining marginally ahead of the 2018 average, 2.49 percent.

Paychex Logo (PRNewsfoto/Paychex, Inc.)

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SOURCE Paychex, Inc.

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