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,” James Diffley, chief regional economist at IHS Markit, said.
According to the report, 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.
“Flat job growth this year suggests that small businesses are struggling to compete with larger companies for talent,” Martin Mucci, Paychex president and CEO, said. “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.”
The National Wage Report indicaes 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.
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.
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.
Analysis for the report is provided for the 20 largest states based on U.S. population.
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.
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).
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, the report delivers real-time insights into the small business trends driving the U.S. economy.