The Paychex | IHS Markit Small Business Employment Watch started the year with an increase in small business job growth and wages in January. The Small Business Jobs Index stands at 99.88, a 0.18 percent increase over December. The jobs growth rate remains below last January’s level by 0.74 percent. Hourly earnings have grown $0.72 in the past year to $26.38. January’s 12-month wages growth rate of 2.81 percent marks an improvement from 2.78 percent in December.
The report shows that Arizona leads states with nearly five percent hourly earnings growth, and at 5.15 percent, Phoenix maintained its hourly earnings growth lead among metros.
“Small business job growth improved 0.18 percent in January, ending a string of ten straight declines,” said James Diffley, chief regional economist at IHS Markit.
“After an extended period of uncertainty, the passing of federal tax reform at the end of last year offered clarity to business owners on the immediate future of U.S. tax policy,” said Martin Mucci, Paychex president and CEO. “While it’s still too early to see the impacts of tax reform on net pay, we’ll be keeping a close eye on this in the weeks ahead.”
National Wage Report
At $26.38, hourly earnings gained 2.81 percent from a year ago, improving from 2.78 percent in December and 2.75 percent in November.
Weekly hours growth remained positive year-over-year, but slowed from 0.37 percent in November to 0.14 percent in January. With this slowdown, weekly earnings fell below three- percent growth for the first time since March last year.
Regional Wage Report
The West continues to far outpace the other regions, with earnings growth at 3.44 percent hourly and 3.86 percent weekly. All other regions are well below three percent growth for both hourly and weekly earnings.
At 2.12 percent, the Midwest continued a year-long deceleration in hourly earnings growth. Annualized one-month and three-month growth rates have been below two percent for the past five months.