Paychex data also shows the January one-month
annualized hourly earnings growth for employees of small businesses
falls to its lowest level since 2020
ROCHESTER, N.Y., Jan. 31,
2023 /PRNewswire/ -- The rate of hourly wage growth
for U.S. small businesses continued to decline to 4.66 percent
year-over-year in January according to the latest Paychex | IHS
Markit Small Business Employment Watch. Additionally, the one-month
annualized earnings growth fell to 2.88 percent in January, the
lowest level since December of 2020. The Small Business Jobs Index,
which measures national employment growth for businesses with fewer
than 50 workers, rose by 0.18 percent to 99.56.
"Our small business wage data indicates that wage gains are
moderating, as has been the aim of monetary policy by the Fed,"
said James Diffley, chief regional
economist at IHS Markit.
"Although small businesses have struggled in attracting and
retaining employees over the past two years, the job index shows
they continue to make gains in hiring with the easing of wage
increases," said John Gibson,
Paychex president and CEO. "The wage index also shows that
employees of small businesses are increasing their hours worked to
increase their earnings."
In further detail, the January report showed:
- The national jobs index (99.56) gained 0.18 percent in January,
its first increase since January
2022.
- At 2.88 percent, one-month annualized hourly earnings growth
fell below three percent for the first time since 2020.
- Hourly earnings growth slowed to 4.66 percent in January,
marking its lowest level since January
2022.
- One-month annualized weekly hours worked growth (1.56 percent)
is at its highest level since mid-2020 and was positive for the
fifth consecutive month.
- Weekly hours worked growth turned positive (0.02 percent) for
the first time since April 2021.
- All four regions reported job gains in January and 15 of 20
states analyzed saw increases.
- The South gained 0.10 percent in January to 100.82, marking its
fourth consecutive increase and tenth consecutive month as the
top-ranked region for small business employment growth.
- North Carolina (102.19)
moderated 0.07 percent in January, but remains the top state for
small business employment growth for the seventh straight
month.
- At a jobs index of 103.00, Houston leads metros by a wide margin in
January as previously second-ranked metro Dallas fell 1.23 percent to 100.82 and fifth
among metros.
- Improving to 98.94, construction gained 0.54 percent on the
jobs index in January marking the strongest one-month change rate
in nearly two years.
- While hourly earnings growth slowed in all other sectors,
leisure and hospitality accelerated to 6.82 percent in
January.
Paychex solutions reach 1 in 12 American private-sector
employees, making the Small Business Employment Watch an industry
benchmark. Drawing from the payroll data of approximately 350,000
Paychex clients with fewer than 50 employees, the monthly report
offers analysis of national employment and wage trends, as well as
examines regional, state, metro, and industry sector activity.
The complete results for January including interactive charts
detailing all data, are available at www.paychex.com/watch.
Highlights are available below.
National Jobs Index
- The national jobs index (99.56) gained 0.18 percent in January,
its first increase since January
2022.
- At 99.56, the jobs index improved to start 2023 (0.18 percent),
but remains down 1.75 percent from last year.
National Wage Report
- Hourly earnings growth slowed to 4.66 percent in January,
marking its lowest level since January
2022.
- At 2.88 percent, one-month annualized hourly earnings growth
fell below three percent for the first time since 2020.
- One-month annualized weekly hours worked growth (1.56 percent)
is at its highest level since mid-2020 and was positive for the
fifth consecutive month.
- Weekly hours worked growth turned positive (0.02 percent) for
the first time since April 2021.
Regional Jobs Index
- All four regions reported gains in January, with the Midwest
leading the way with a 0.35 percent increase.
- The South gained 0.10 percent in January to 100.82, marking its
fourth consecutive increase and tenth consecutive month as the
top-ranked region for small business employment growth.
Regional Wage Report
- At 5.02 percent, the South has led regions in hourly earnings
growth since August 2022 and has
reported growth above five percent since March 2022.
- Weekly hours worked growth in the Northeast is strongest among
regions, reporting 0.22 percent 12-month growth and 2.56 percent
one-month annualized growth.
- The Midwest ranks last among regions in hourly earnings
($29.32 per hour) and growth (4.53
percent).
State Jobs Index
- Hiring gains were broad-based as 15 of the 20 states analyzed
reported increases in January.
- North Carolina (102.19)
moderated 0.07 percent in January but remains the top state for
small business employment growth for the seventh straight
month.
- Three states in the East North Central division have improved
the most among states during the past quarter, Wisconsin (2.02 percent), Illinois (1.47 percent), and Indiana (1.27 percent).
Note: Analysis is provided for the 20 largest states based on
U.S. population.
State Wage Report
- Florida hourly earnings growth
(6.19 percent) remains the strongest among states for the past five
months despite slowing for three consecutive months.
- Besides Florida, the only
other states with hourly earnings growth above five percent in
January are Missouri, Texas, Indiana, and Wisconsin.
- At 3.21 percent, Virginia
ranks last among states in hourly earnings growth and has the
lowest one-month annualized growth rate in January (1.66
percent).
- Ranked last among states two months ago, weekly hours worked
growth in Florida now ranks third
at 0.29 percent. One-month annualized growth was above five percent
in both December and January.
Note: Analysis is provided for the 20 largest states based on
U.S. population.
Metropolitan Jobs Index
- At 103.00, Houston leads
metros by a wide margin in January as previously second-ranked
metro Dallas fell 1.23 percent to
100.82 and fifth among metros.
- The only metros with an index below 98 all reside in
California (Riverside, San
Diego, and San
Francisco).
Note: Analysis is provided for the 20 largest metro areas
based on U.S. population.
Metropolitan Wage Report
- Miami ranks first among metros
for both hourly (6.37 percent) and weekly (6.60 percent) earnings
growth, and is the only metro with growth above six percent in both
categories.
- At 0.49 percent, New York is
the top-ranked metro for weekly hours worked growth in
January.
- Hourly earnings growth in Riverside (4.84 percent) slowed quickly to
begin 2023 as one-month annualized growth hit its lowest level
(-2.82 percent) since 2014.
Note: Analysis is provided for the 20 largest metro areas
based on U.S. population.
Industry Jobs Index
- At 100.33, leisure and hospitality gained 0.27 percent in
January, increasing its pace of small business job growth for the
third consecutive month.
- Improving to 98.94, construction gained 0.54 percent in January
marking the strongest one-month change rate in nearly two
years.
- Moderating 0.07 percent to 97.27, financial activities was the
only sector to slow and remains in last place to begin 2023.
Note: Analysis is provided for seven major industry sectors.
Definitions of each industry sector can be found here. The other
services (except public administration) industry category includes
religious, civic, and social organizations, as well as personal
services, including automotive and household repair, salons, dry
cleaners, and other businesses.
Industry Wage Report
- While hourly earnings growth slowed in all other sectors,
leisure and hospitality accelerated to 6.82 percent in
January.
- Education and health services growth ranks last among sectors
for hourly earnings (3.88 percent), weekly earnings (3.70 percent),
and weekly hours worked (-0.28 percent).
- Hourly earnings growth in construction moderated to 5.05
percent, but improved to third among sectors, trailing only leisure
and hospitality (6.82 percent) and other services (5.10
percent).
Note: Analysis is provided for seven major industry sectors.
Definitions of each industry sector can be found here. The other
services (except public administration) industry category includes
religious, civic, and social organizations, as well as personal
services, including automotive and household repair, salons, dry
cleaners, and other businesses.
For more information about the Paychex | IHS Markit Small
Business Employment Watch, visit www.paychex.com/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 integrated human capital management software solutions for human
resources, payroll, benefits, and insurance services, and IHS
Markit, a world leader in critical information, analytics, and
expertise. Focused exclusively on small business with fewer than 50
employees, 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 human resources, payroll,
benefits, and insurance services. By combining innovative
software-as-a-service technology and mobility platform with
dedicated, personal service, Paychex empowers business owners to
focus on the growth and management of their business. Backed by 50
years of industry expertise, Paychex serves more than 730,000
payroll clients as of May 31, 2022 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
(NYSE: 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
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Media Contacts
Chris Muller
Paychex, Inc.
+1 585-338-4346
cmuller@paychex.com
@Paychex
Kate Smith
IHS Markit
+1 781-301-9311
katherine.smith@ihsmarkit.com
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SOURCE Paychex, Inc.