Wages Continue to Accelerate for Workers; Small Business Hiring Slows in May
ROCHESTER, N.Y. , May 31, 2022 /PRNewswire/ -- Workers at U.S. small businesses saw the 12th consecutive month of increasing hourly earnings gains, while the pace of job growth slowed in May. These insights are according to the latest Paychex | IHS Markit Small Business Employment Watch. The May report shows average hourly earnings stand at $30.31, up by 5.19 percent from a year ago. The Small Business Jobs Index, which measures the year-over-year rate of employment growth, decreased 0.27 percent from the previous month to an index level of 100.87.
"As the unemployment rate nears record lows, small business hiring has also slowed," said James Diffley, chief regional economist at IHS Markit.
"After holding near an eight year high in April, small business job growth was down in May. Despite the one-month change, job growth at U.S. small businesses remains strong even in the face of the tight labor market and inflation pressures," said Martin Mucci, Paychex CEO.
In further detail, the May report showed:
- Nationally, hourly earnings have increased $1.50 during the past year, now reaching $30.31.
- At 100.87, the national jobs index saw the largest one-month decline in more than two years.
- The south continued as the top region for small business job growth, Texas was once again the leading state, and Dallas continued as the top metro.
- The south was the top region for hourly earnings growth, including North Carolina as the leading state.
- Leisure and hospitality leads the industry sectors in both small business job 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 May, including interactive charts detailing all data, are available at www.paychex.com/watch. Highlights are available below.
National Jobs Index
- The national index slowed 0.27 percent in May, the largest one-month decrease since the onset of the COVID-19 pandemic more than two years ago.
- As the U.S. moves closer to full employment, the national jobs index decelerated to 100.87 in May, the first month in 2022 below 101.
- The pace of small business growth has slowed at an increasing rate each month since January 2022.
National Wage Report
- Hourly earnings growth increased for the 12th consecutive month, from 2.72 percent in May 2021 to 5.19 percent in May 2022. At $30.31, hourly earnings have increased $1.50 during the past year.
- In addition to annual hourly earnings growth reaching a new record level in May 2022 (5.19 percent), one-month and three-month annualized growth also set new highs, 7.00 percent and 5.53 percent, respectively.
- Weekly earnings growth improved modestly to 4.46 percent, while weekly hours worked growth has remained negative since April 2021.
Regional Jobs Index
- The May slowdown in small business employment growth impacted all regions, with the Midwest having the smallest decrease (-0.18 percent) and the South having the largest decrease (-0.33 percent).
- At 101.17, the South continues to lead regional small business employment growth. The jobs index in the South has been above 101 for seven consecutive months.
Regional Wage Report
- At 5.46 percent, the South leads regions in hourly earnings growth, followed closely by the West (5.36 percent) and the Midwest (5.30 percent).
- The Northeast is last among regions in both earnings and hours worked growth; all regions have hourly earnings growth above five percent and weekly earnings growth above four percent, except for the Northeast.
State Jobs Index
- The small business job market continues to be very strong in Texas as its index is highest among states (102.96) and has been above 102 for ten straight months.
- Ranked second among states as recently as February 2022, the Arizona jobs index has slowed 2.22 percent during the past quarter and now ranks 14th among states (100.65).
- At 101.53, the Washington jobs index has the best 12-month growth rate among states, up 7.18 percent. Virginia (4.81 percent) and New York (4.70 percent) rank second and third among states for 12-month change rate.
Note: Analysis is provided for the 20 largest states based on U.S. population.
State Wage Report
- At 6.22 percent, North Carolina leads states in hourly earnings growth for the eighth time during the past ten months. Three other states (Arizona, Ohio, and Florida) also have hourly earnings growth above six percent.
- Pennsylvania and Virginia lag states in hourly earnings growth, both reporting 3.84 percent in May.
- Texas leads weekly growth among states in both earnings (5.53 percent) and hours worked (0.23 percent). Moreover, Texas is the only state with positive weekly hours worked growth in May.
Note: Analysis is provided for the 20 largest states based on U.S. population.
Metropolitan Jobs Index
- At 105.33, Dallas is the strongest metro for small business employment growth for the ninth consecutive month with an index three points higher than the next best metros (Miami, 102.10 and Houston, 101.80).
- Seattle gained 0.70 percent in May and 7.95 percent from last May, the best one-month and 12-month change rates among metros. At 101.63, Seattle's index is fourth among metros, a three-year high ranking.
- Florida metros Miami and Tampa have been on divergent paths during 2022. Since January, Miami has gained a modest 0.32 percent, while Tampa has dropped 2.91 percent. Tampa ranks last among metros (99.14) in May, though it ranked in the top 3 for 22 consecutive months from January 2020 to October 2021.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Metropolitan Wage Report
- Hourly earnings growth spiked to 6.74 percent in Dallas in May as one-month annualized growth has averaged 8.80 percent during 2022.
- Philadelphia and Washington are the only metros with hourly earnings growth below four percent in May.
- Tampa tops the metros for weekly earnings growth at 6.02 percent, and ranks second only to Dallas for hourly earnings growth (6.19 percent).
- Comparing weekly hours worked growth among Texas metros, Houston continues to rank first among metros (0.36 percent), while Dallas continues to rank last (-1.30 percent).
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.
Industry Jobs Index
- Leisure and hospitality decreased 1.15 percent in May to 104.01. While it remains the top-ranked jobs index, the sector has had the weakest one-month change rate for the past four months as it has been unable to maintain the rapid recovery pace of job growth.
- Manufacturing (0.20 percent) and construction (0.14 percent) were the only two sectors to improve their pace of small business employment growth in May.
- At 98.15, financial activities slowed for the ninth time during the past ten months and has ranked last among sectors since October 2021.
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, drycleaners, 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 continues its run as the top sector for earnings growth and bottom sector for hours worked growth. At 8.66 percent, hourly earnings growth in leisure and hospitality are more than two percent above the next best sector (other services, 6.40 percent).
- Education and health services is the only sector with hourly earnings growth (3.86 percent) or weekly earnings growth (3.19 percent) below four percent. Furthermore, it is only ahead of leisure and hospitality for weakest weekly hours worked growth (-0.50 percent).
- Construction (0.25 percent) and manufacturing (0.09 percent) are the only two sectors with positive weekly hours worked growth.
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, drycleaners, 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.
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 integrated human capital management software solutions for human resources, payroll, benefits, and insurance services, and IHS Markit, a world leader in critical information, analytics, and expertise. Focused exclusively on small business 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. 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 software 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 50 years of industry expertise, Paychex served more than 710,000 payroll clients as of May 31, 2021 in the U.S. and Europe, and pays one out of every 12 American private sector employees. Learn more about Paychex by visiting 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 © 2021 IHS Markit Ltd. All rights reserved.
Media Contacts
Lisa Flemin
Paychex, Inc.
+1 585-387-6402
[email protected]
@Paychex
Kate Smith
IHS Markit
+1 781-301-9311
[email protected]
SOURCE Paychex, Inc.
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