Weekly Earnings Growth Continues to Increase as Jobs Growth Holds Steady
ROCHESTER, N.Y., Feb. 4, 2020 /PRNewswire/ -- The latest Paychex | IHS Markit Small Business Employment Watch reflects a continuation of the tight labor market to start 2020. Weekly earnings growth improved for the 13th consecutive month, reaching 3.59 percent in January. Weekly hours worked were up 0.83 percent from last year, contributing to the growth in weekly earnings. The pace of small business employment growth remains consistent, with the national jobs index increasing slightly (0.01 percent) in January to 98.18.
"The national index has been flat since mid-year 2019, signaling a continued tight labor market for small businesses," said James Diffley, chief regional economist at IHS Markit.
"With election season heating up and the economy top of mind for business owners, this month's Small Business Employment Watch demonstrates the continuing stability of jobs growth recently, as well as weekly earnings improvement," said Martin Mucci, Paychex president and CEO. "The data shows consistent employment growth and yet another month of encouraging wage growth, two key indicators that the economy is off to a solid start in 2020."
Broken down further, the January report showed:
- The South continues to top regions for small business employment growth; the West remains the leading region for hourly earnings growth.
- Tennessee ranks first among states in small business job growth; New York leads in hourly earnings growth.
- Phoenix became the top metro for small business job growth; San Francisco leads metros in hourly earnings growth.
- At 5.12 percent, Leisure and Hospitality leads hourly earnings growth among industry sectors.
The complete results for January, including interactive charts detailing all data at a national, regional, state, metro, and industry level, are available at www.paychex.com/employment-watch. Highlights are available below.
National Jobs Index
- The decline seen in small business employment growth during the first half of 2019 has given way to hiring stability over the past two quarters.
- Up a modest 0.01 percent in January, the national index continues to show very little change in job gains.
- At 98.18, the Paychex | IHS Markit Small Business Jobs Index is up 0.04 percent during the past quarter, but down 0.76 percent from last year.
National Wage Report
- Weekly earnings growth reached 3.59 percent, improving for the 13th straight month.
- At 2.89 percent, hourly earnings growth dipped below the three percent mark to begin 2020.
- Weekly hours worked are up 0.83 percent from last year.
Regional Jobs Index
- Above 98, the Northeast is reporting positive year-over-year growth for the first time in nearly three years. Strong performance in the Leisure and Hospitality sector is a contributor to that growth, up 2.60 percent since last year in the Northeast.
- Led by California, the West fell sharply in January (down 0.69 percent), and is now the weakest region for small business job gains.
- At 99.13, the South is the strongest region for job gains, up 0.26 percent in January.
Regional Wage Report
- The West leads in hourly earnings and hours worked growth, with weekly earnings accelerating for the 12th consecutive month to 4.35 percent in January.
- Due to an increase in hours worked, weekly earnings are on the rise in the Midwest, up to 2.81 percent this January compared to 1.97 percent in January 2019.
State Jobs Index
- Fourteen of the 20 states reported an increase in the pace of employment growth in January.
- Down 1.13 percent from the previous month and 2.47 percent from last year, California now has the lowest index among states at 96.67.
- Tennessee and Arizona are the only states above 100.
Note: Analysis is provided for the 20 largest states based on U.S. population.
State Wage Report
- New York, California, and Tennessee lead wage growth among states.
- Paired with a significant decline in job growth, California is the top state for weekly hours worked and weekly earnings growth.
- Texas trails all states in hourly and weekly earnings growth, 1.50 percent and 2.18 percent, respectively.
Note: Analysis is provided for the 20 largest states based on U.S. population.
Metropolitan Jobs Index
- Phoenix became the top metro for small business job growth in January as Dallas slowed for the sixth consecutive month.
- The Southern California metros of Los Angeles, Riverside, and San Diego had the three weakest one-month growth rates among metros.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Metropolitan Wage Report
- San Francisco (4.25 percent) and Los Angeles (4.23 percent) are the only metros with hourly earnings growth above four percent.
- At 3.77 percent, hourly earnings growth is surging in Baltimore.
- Houston (1.16 percent) and Tampa (1.26 percent) trail significantly in hourly earnings growth.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Industry Jobs Index
- All industry sectors saw growth in January, except Leisure and Hospitality, down 0.53 percent.
- Trade, Transportation, and Utilities and Manufacturing remain below 97, though both reported positive gains during the past three months.
Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The Other Services (excluding 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.
Industry Wage Report
- At 5.12 percent, Leisure and Hospitality leads hourly earnings growth among sectors, with Manufacturing a distant second at 3.61 percent.
- Education and Health Services trails all other sectors in hourly earnings growth at 1.56 percent.
- Construction slowed below three percent hourly earnings growth in December for the first time in 2019, and fell further in January to 2.71 percent.
Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The Other Services (excluding 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.
For more information about the Paychex | IHS Markit Small Business Employment Watch, 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.
Paychex, Inc. (NASDAQ: PAYX) is a leading provider of integrated human capital management solutions for human resources, payroll, benefits, 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 more than 45 years of industry expertise, Paychex serves approximately 670,000 payroll clients as of May 31, 2019 across more than 100 locations 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 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 © 2020 IHS Markit Ltd. All rights reserved.
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SOURCE Paychex, Inc.