“As the national GDP flattens, the Small Business Jobs Index also slowed significantly in July,” said James Diffley, chief regional economist at IHS Markit. “With an index level above 100, we’re seeing continued job growth, but the pace of that growth has declined.”
“For nearly two years, businesses added staff at a rapid pace to make up for the losses experienced during the pandemic,” said Martin Mucci, Paychex CEO. “While the growth rate has slowed, additional analysis of our client base indicates demand for workers continues to be robust while the shortage of available applicants is slowing the overall job growth rate.”
In further detail, the July report showed:
- The jobs index in all regions declined in July, with the West slowing the most (-0.81 percent).
- At 100.67, the South continues as the strongest region for small business employment growth.
- North Carolina is the new top state for job growth; Florida is the new top state for hourly earnings growth.
- Dallas continues to lead U.S. metros in small business job growth and hourly earnings growth for workers.
- Other services (except public administration) remained the top sector for job growth in July at 103.11.
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 July, including interactive charts detailing all data, are available at www.paychex.com/watch. Highlights are available below.
- The national index declined in July, down 0.66 percent from the previous month.
- The small business employment growth rate slowed for the fifth consecutive month, from 101.33 in February to 100.14 in July.
- At 5.08 percent, hourly earnings growth moderated for the second month in a row.
- Weekly earnings growth improved for the fifth consecutive month, from 3.95 percent in February to 4.62 percent in July.
- Though negative (-0.35 percent) in July, weekly hours-worked growth improved this month, reaching its highest level so far this year.
- All regions declined in July, with the West slowing the most (-0.81 percent).
- At 100.67, the South leads regional indexes for the fourth straight month.
- The West (99.84) and the Midwest (99.67) both fell below 100 in July.
Note: Percentages displayed in the regional heat map reflect 12-month changes.
- At 5.59 percent, hourly earnings growth in the South increased for the 15th consecutive month. Furthermore, the South led in weekly earnings and employment growth.
- For the third straight month, the Northeast was the only region with hourly earnings growth below five percent (4.53 percent) and weekly earnings growth below four percent (3.92 percent).
Note: Percentages displayed in the regional heat map reflect 12-month changes.
- At 102.68, North Carolina led states by a large margin.
- Tennessee (0.20 percent) and Arizona (0.08 percent) were the only state indexes to improve in July.
- Four states (Wisconsin, Indiana, Missouri, and Massachusetts) each fell by one percent in July.
Note: Analysis is provided for the 20 largest states based on U.S. population.
- Florida ranked first among states in hourly earnings growth (6.34 percent) as well as weekly earnings growth (5.84 percent). However, Arizona, Ohio, and Indiana weren’t far behind as each of them had hourly earnings growth above 6 percent.
- Virginia was the only state with hourly earnings growth below 4 percent.
- None of the 20 states analyzed had growth in weekly hours worked.
Note: Analysis is provided for the 20 largest states based on U.S. population.
- At 104.02, Dallas continued to lead metros despite having the second largest
one-month decrease (-1.34 percent). - Another Texas metro, Houston, ranked second at 101.97 and was one of only two metros (Houston and Phoenix) to improve its index level in July.
- California is home to the three lowest-ranked metros: San Francisco, Riverside, and San Diego. San Francisco slowed 1.60 percent in July, the most significant decline, and is once again the lowest ranked metro (98.49).
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
- Dallas led metros in hourly earnings growth (7.30 percent), increasing for the 22nd consecutive month. Though Dallas also led employment growth by a wide margin, its weekly hours-worked growth (-1.25 percent) ranked last among metros.
- Tampa (6.30 percent), followed by Dallas (6.19 percent), and Miami (6.13 percent), topped weekly earnings growth among metros in July.
- Houston (0.28 percent) and Tampa (0.10 percent) were the only two metros with positive weekly hours-worked growth.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
- At 103.11, other services (except public administration) remained July’s top sector.
- Falling 1.99 percent to 101.14, leisure and hospitality had the largest decrease among sectors for the sixth consecutive month.
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, drycleaners, and other businesses.
- At 7.15 percent, other services (except public administration) led hourly earnings growth among industries. One- and three-month annualized growth were also above 7 percent.
- Hourly earnings growth (6.28 percent) in leisure and hospitality slowed for the sixth straight month. One-month annualized hourly earnings fell to 1.78 percent.
- Construction was the only sector with positive weekly hours-worked growth (0.38 percent). Leisure and hospitality ranked lowest (-1.64 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, drycleaners, and other businesses.
