ROCHESTER, NY—The latest Paychex | IHS Markit Small Business Employment Watch shows an upturn in the pace of small business job growth for the third straight month, a trend last seen in early 2017.
Though down 0.61% from last year, employment growth increased 0.15% from the previous month, and 0.22% in the past quarter, to 98.32. Hourly earnings growth dipped to 2.74% in February. Weekly hours worked also fell for the second consecutive month but remain up 0.41% from a year ago.
“The national jobs index has turned upward as three monthly increases have recovered the ground lost since June of last year. Wage growth, however, peaked late in 2019 and has begun to decelerate in 2020,” said James Diffley, chief regional economist, IHS Markit.
“The past three months mark the longest string of job growth increases in nearly three years, indicating a positive start for small business hiring in 2020,” said Martin Mucci, president/CEO, Paychex. “However, these results have yet to reflect any impact from cases of the COVID-19 (coronavirus), which are expected to increase in the coming months.”
Among the highlights from the February report:
- The South remains the leading region for small business employment growth; the West continues as the top region for hourly earnings growth. Tennessee continues to lead states in small business job growth; California leads in hourly earnings growth.
- Philadelphia became the top metro for small business job growth; Los Angeles ranks first among metros in hourly earnings growth.
- Small business hiring growth is widespread, with all industry sectors showing employment gains during the past quarter.