Hourly earnings growth continued to advance for the 10th consecutive month for workers of US small businesses, according to the latest "Paychex | IHS Markit Small Business Employment Watch."
The report also showed that national small business job growth remained near its recent record high, moderating 0.03% in March. The national jobs index stands at 101.29, increasing 7.47% over the past year. Hourly earnings growth grew to 4.76% year-over-year.
The report shows that small business job growth continues to be historically strong. “Many employees continue to benefit from solid hourly earnings growth. In fact, year-over-year hourly earnings growth has improved more than 2% since May 2021,” says Paychex CEO Martin Mucci. “This is good news for Americans feeling the pressure of inflation and higher prices at the gas pump.”
In further detail, the March report showed:
- At 101.29, the national index remains near its historic peak set in January 2022.
- The West remains the top region for small business job growth, North Carolina the highest-ranking state, and Dallas the top metro.
- Nationally, hourly earnings growth improved to 4.76%, its 10th consecutive increase.
- Annual weekly earnings growth grew to above 4%.
- The West and South lead regions with hourly earnings growth above 5%.
- Ohio and North Carolina have the highest rates of hourly earnings growth, both above 6%.
- Leisure and hospitality leads the industry sectors in both small business jobs growth and hourly earnings growth.
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 March, including interactive charts detailing all data, are available at www.paychex.com/watch. Highlights are available below.
March 2022 Paychex | IHS Markit Small Business Employment Watch
National Jobs Index
- Though the national index dipped slightly, at 101.29, it remains near its record pace set in January.
- After eight consecutive gains from June 2021 through January 2022, the national index held steady in February and moderated slightly in March (-0.03%).
National Wage Report
- Annual weekly earnings growth (4.08%) climbed back above 4% due to very strong gains in March as one-month annualized growth spiked to 6.83%.
- Hourly earnings growth improved slightly to 4.76%, its tenth consecutive increase. Year-over-year growth has improved more than 2% since May 2021 (2.74 %).
- One-month annualized growth in weekly hours worked jumped to 1.75%, the highest rate since the first wave of the pandemic.
Regional Jobs Index
- The pace of small business employment growth in the West eased 0.17% to 101.60, but remains the fastest growing region.
- At the bottom of the regional rankings, the Midwest (100.39) was the only region to improve in March (0.06%).
- Up 8.53% from last year, the Northeast index (101.41) has improved the most among regions.
Note: Percent ages displayed in the regional heat map reflect 12-month changes.
Regional Wage Report
The West (5.04%) and the South (5.01%) lead regions with hourly earnings growth exceeding five %. The Northeast trails at 4.19 % hourly earnings growth.
Weekly earnings growth is strongest in the South (4.31%), though one-month annualized growth indicates all regions were very strong in March (all above 5%).
- One-month annualized weekly hours worked growth in the Northeast spiked to 3.42%, indicating a significant increase in hours worked from February to March.
Note: Percent ages displayed in the regional heat map reflect 12-month changes
State Jobs Index
- At 103.10, North Carolina remains the best state for small business employment growth for the second straight month.
- Georgia (102.97) jumped two spots to second place among states with the strongest one-month change among states (0.60%).
- California and Virginia both slowed in March, their first decrease since February 2021.
Note: Analysis is provided for the 20 largest states based on the US population. The chart’s dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.
State Wage Report
- Ohio (6.44%) and North Carolina (6.13%) lead states with hourly earnings growth topping 6% in March.
- At 5.10%, Florida leads states in weekly earnings growth. At 1.77%, Missouri has the weakest weekly earnings growth by more than a percent.
- Five states have hourly earnings growth below four %, with Pennsylvania (3.39%) lowest among states.
Note: Analysis is provided for the 20 largest states based on US population.
Metropolitan Jobs Index
- The top metro for the seventh consecutive month, Dallas improved its pace of hiring 0.42% in March bringing its index to 105.12.
- At 101.75, San Diego jumped six spots with the best one-month change (0.51%) among states in March. Other California metros San Francisco, Los Angeles, and Riverside all slowed in March.
- Besides Phoenix (-0.55%), Florida metros Miami (-0.46%) and Tampa (-0.44%) had the weakest one-month changes among metros in March.
Note: Analysis is provided for the 20 largest metro areas based on US population. The chart’s dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.
Metropolitan Wage Report
Eight metros topped 5% hourly earnings growth year-over-year, led by Denver at 5.81%.
Florida metros Miami (5.40%) and Tampa (5.02%) are the top two metros for weekly earnings growth.
- All metros have weekly earnings growth above three %, despite negative weekly hours worked growth for 16 of the 20 metros.
Note: Analysis is provided for the 20 largest metro areas based on the US population.
Industry Jobs Index
- For the second consecutive month, leisure and hospitality (106.09) had the largest slowdown, 0.48 %, though its small business employment growth rate remains well ahead of other sectors.
- Up to 100.17 and third among sectors in March, education and health services has improved its pace of employment growth in eight of the past nine months.
- Construction (98.73) continues to moderate slightly month-to-month. Its index has been in the 98 range each month since May 2021.
- Manufacturing (100.06), which had been ranked third since August 2021, fell 0.33% and is now fourth among sectors.
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. The chart’s dark blue bars reflect the index level and the light blue diamonds reflect the 12-month change.
Industry Wage Report
- Leisure and hospitality leads sectors in hourly earnings growth at 9.71%, nearly 4% higher than the next closest sector, trade, transportation, and utilities (5.96 %).
- At 3.63%, education and health services is the only sector with hourly earnings growth below 4%.
- All sectors had positive one-month annualized weekly hours worked growth in March. This trend was especially seen in sectors reflecting strong discretionary spending, leisure and hospitality (7.67%) and other services (2.23%).
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.
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