Paychex | IHS Markit Small Business Employment Watch: Job Growth Shows Slight Increase in May, Annual Wage Growth Dips to 2.59 Percent

  • The Small Business Jobs Index increased 0.07 percent to 99.60 in May
  • At $26.61, hourly earnings growth increased 2.59 percent YOY ($0.67); one-month and three-month annualized hourly earnings growth continue to trend higher than the annual rate
  • South leads regions in employment growth; West ranks highest for wage growth
  • Texas ranks first in state job growth; Arizona remains first in annual hourly earnings growth
  • Denver continues to lead metros in job growth; Phoenix remains first among metros in wage growth
  • At 100.30, Construction has been above 100 for the past six years; Trade, Transportation, and Utilities leads weekly earnings growth among industries (4.07 percent)
Tuesday, May 29, 2018 9:58 am EDT

Dateline:

Rochester, N.Y.
"The national index saw a slight improvement in May, its first since January, but remains below 100"

The Paychex | IHS Markit Small Business Employment Watch for May shows a small increase in the rate of hiring and a slight decrease in the pace of wage growth. The Small Business Jobs Index grew for the first time since January, up 0.07 percent to 99.60. Job growth among small businesses is down 0.73 percent year-over year, reflecting tightening labor markets. Hourly earnings grew $0.67 to $26.61, up 2.59 percent from last year. The pace of annual wage growth is down from its peak of 2.96 percent in June 2017, but one-month (2.80 percent) and three-month (2.86 percent) annualized hourly earnings growth continue to trend higher than the annual rate.

“The national index saw a slight improvement in May, its first since January, but remains below 100,” said James Diffley, chief regional economist at IHS Markit.

“It’s encouraging to see the jobs index increase for the first time since January. The modest rate of growth in small business employment reflects the continuing pressure of the tightening labor market,” said Martin Mucci , Paychex president and CEO.

May 2018 Paychex | IHS Markit Small Business Employment Watch



National Jobs Index

  • At 99.60, the Small Business Jobs Index increased slightly in May, but is down 0.73 percent year-over-year.
  • Reflecting tightening labor markets, the 12-month growth rate has been negative since March 2017.


National Wage Report

  • Hourly earnings growth peaked at 2.96 percent in June, but has steadily decelerated to 2.59 percent in May.
  • The three-month annualized growth rate improved to 2.86 percent, increasing for the sixth consecutive month.
  • At 2.80 percent, the one-month annualized growth rate continues to trend higher than the annual rate, but reversed its path downward in May.

Regional Jobs Index

  • Back over 99, the West had its best one month gain in more than a year, 0.21 percent.
  • The Midwest was the only region to decrease in May, declining slightly (0.07 percent) to 99.75.

Note: Percentages displayed in the regional heat map reflect 12-month changes.

Regional Wage Report

  • Decelerating further in May to 2.25 percent, the South is now the weakest region for hourly earnings growth.
  • Though hourly earnings growth is only slightly higher in the Midwest, 2.29 percent, one-month and three-month annualized growth rates are both above 3 percent.

Note: Percentages displayed in the regional heat map reflect 12-month changes.

State Jobs Index

  • With its third strong gain of 2018, Texas moved into first place among states with an index level of 101.09.
  • Back to 100, Missouri jumped four spots in April and 10 spots in May, improving more than 2 percent in 2018.

Note: Analysis is provided for the 20 largest states based on U.S. population. The chart’s dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.

State Wage Report

  • Falling below 1 percent in May, Virginia is experiencing a quick drop-off in hourly earnings growth in 2018.
  • Wage growth is slowing moderately in New York, but remains above 3 percent and near the top of the state rankings.
  • Earnings growth in Illinois has picked up in 2018, averaging an $0.08/hour increase per month, compared to only $0.04/hour in 2017.

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

Metropolitan Jobs Index

  • St. Louis is over 100 for the first time since 2016 and is ranked sixth among metros, its highest ranking in more than 10 years.
  • Detroit jumped 0.41 percent in May and is back over 100 for the first time since May 2017.
  • Houston continues to show strong improvement in small business employment growth, up 2.17 percent year-over-year and over 101.

Note: Analysis is provided for the 20 largest metro areas based on U.S. population. The chart’s dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.

Metropolitan Wage Report

  • Topped by Phoenix, the Southwestern metros remain the leaders in wage gains.
  • Seattle has both the weakest hourly earnings and weekly hours worked growth among metros. Ranked positively in 2017, wage growth has quickly lost momentum in Seattle during 2018.

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

Industry Jobs Index

  • At 99.36, Leisure and Hospitality has trended below 100 since September, but had a solid 0.26 percent gain in May and remains the sector with the best performance compared to the 2004 base year.
  • At 100.30, Construction has been above 100 for the past six years, signifying steady small business employment growth.

Note: Analysis is provided for seven major industry sectors. The chart’s dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.

Industry Wage Report

  • Near 4 percent, Leisure and Hospitality has had the strongest hourly earnings growth each month of 2018.
  • Professional and Business Services has decelerated to 2.17 percent growth in May, ranking last among industry sectors in 2018.
  • At 4.07 percent, Trade, Transportation, and Utilities leads weekly earnings growth among industries.

Note: Analysis is provided for seven major industry sectors.

For more information about the Paychex | IHS Markit Small Business Employment Watch, including interactive charts detailing all data at a national, regional, state, metro, and industry level, 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, HR, retirement, 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 45 years of industry expertise, Paychex serves approximately 605,000 payroll clients as of May 31, 2017, across more than 100 locations 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 © 2018 IHS Markit Ltd. All rights reserved.

###

Media Contacts

Lisa Fleming

Paychex, Inc.

585-387-6402

lfleming@paychex.com

@PaychexNews

Timothy Barello

IHS Markit

646-679-3463

timothy.barello@ihsmarkit.com


Tess Flynn

Eric Mower + Associates

716-880-1488

tflynn@mower.com

Contact:

All Industries
IHS Media Relations, +1 303 305 8021
press@ihs.com
or
Financial Services
Timothy Barello, +1 646 679 3463
Financial Services
Timothy.barello@ihsmarkit.com

Multimedia Files:

2018 May Paychex IHS Markit Small Business Employment Watch