Hourly earnings growth for small business workers holds steady
According to the Paychex Small Business Employment Watch, U.S. employers with fewer than 50 employees continued to add jobs in June, though at a slower pace than in May. Hourly earnings growth for small business workers held steady at 3.16% in June.
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U.S. small businesses continued to add jobs in June, though at a slower pace than May, while wage growth held steady. (Graphic: Business Wire)
"Small businesses continued to add jobs across the country in June and there was little change in wage inflation, which reflects relative stability for small businesses," said John Gibson, Paychex president and CEO. "The trends in our wage data over the first half of 2024 are also signaling steady hourly earnings growth heading into the second half of the year."
"While jobs are growing nationally, small businesses in some geographies and industries continue to face a challenging operating environment due to complex regulations, a tight labor market, and inflationary pressures," Gibson added. "We are continuing to see the impact of these challenges in the West region, particularly in the state of California, which came in last among states for job growth in June. At the same time, our customers are telling us they are being more selective in the hiring process and searching for candidates who will boost their culture and bottom line."
Jobs Index and Wage Data Highlights:
- The national jobs index continued to represent employment gains in June (100.29), though at a slower pace than May (100.58) and June 2023 (101.37).
- National hourly earnings growth held steady at 3.16% in June, consistent with the moderating trend reported during the first half of 2024.
- One- and three-month annualized hourly earnings growth reported 3.04% and 2.85% in June, respectively, slightly below the 12-month growth rate (3.16%).
- California (99.37) dropped to last among states in June and has reported an index level below 100 for three-straight months, indicating year-over-year job losses. Leisure and Hospitality ranked last among sectors analyzed in California in June, slowing 2.70 percentage points over the last quarter. Weekly hours worked growth in Leisure and Hospitality across the state was down 1.77% last month.
- The two largest industry sectors, Education and Health Services (102.18) and Professional and Business Services (100.20), increased their rate of small business employment growth from last month in June.
- Weekly earnings growth (2.96%) improved for the third consecutive month, though the increases have been marginal (0.03%).
The complete Small Business Employment Watch results for June 2024, including interactive charts detailing the data at a national, regional, state, metro, and industry sector level are available at www.paychex.com/watch. Learn more and sign up to receive monthly Employment Watch alerts.
About the Paychex Small Business Employment Watch
The Paychex Small Business Employment Watch is released each month by Paychex, Inc. Focused exclusively on businesses with fewer than 50 workers, the monthly report offers analysis of national employment and wage trends and examines regional, state, metro, and industry sector activity. Drawing from the payroll data of approximately 350,000 Paychex clients, this powerful industry benchmark delivers real-time insights into the small business trends driving the U.S. economy. The jobs index is scaled to 100, which represents no year-over-year change in job growth among same store businesses. Index values above 100 represent new jobs being added, while values below 100 represent jobs being lost.
About Paychex
Paychex, Inc. (NASDAQ:PAYX) is an industry-leading HCM company delivering a full suite of technology and advisory services in human resources, employee benefit solutions, insurance, and payroll. The company serves over 745,000 customers in the U.S. and Europe and pays one out of every 12 American private sector employees. The more than 16,000 people at Paychex are committed to helping businesses succeed and building thriving communities where they work and live. Visit paychex.com to learn more.
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