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Small business job growth continues to accelerate in August

National job growth continued to rise significantly in August, according to aggregated payroll data of approximately 350,000 clients provided by Paychex. The data released in the latest report of the Paychex/IHS Markit Small Business Employment Watch shows the Small Business Jobs Index gained 0.45 percent in August. California (4.16 percent) and Missouri (4.04 percent) are the only states with hourly earnings growth above four percent. Nationally, hourly earnings growth increased to 3.42 percent in August, its third consecutive gain.

“The Small Business Jobs Index reached its highest level since January 2018,” said James Diffley, chief regional economist at IHS Markit. “The national index climbed 1.56 percent in the quarter to 99.80.”

“August’s growth in employment suggests continued economic recovery,” said Martin Mucci, Paychex president and CEO. “In the weeks ahead, we’ll be examining the impact of the conclusion of extended COVID-19 unemployment benefits, which could provide another boost to hiring.”

In further detail, the August report showed:

  • Leisure and hospitality continued its recovery in August with its employment index surging to 101.90, up 14.61 percent since August 2020.
  • Hourly earnings growth is up 8.36 percent since last year in leisure and hospitality.
  • All regions of the U.S. had sizable employment gains in August. The South remains the leader in small business job growth.
  • Arizona continues to lead all states in small business job growth.
  • Tampa leads all metros in small business employment growth, with Dallas, Atlanta, Phoenix, and Houston rounding out the top five.

National Jobs Index

  • The pace of small business employment growth continues to accelerate this summer. The national index gained 0.45 percent in August and 1.56 percent during the past quarter.
  • The recovery in the leisure and hospitality sector has driven much of the gains in small business employment growth seen nationally.
  • At 99.80, the national index has gained a record-high 5.74 percent during the past 12 months.

National Wage Report

  • Hourly earnings growth increased to 3.42 percent in August, its third consecutive increase. One-month annualized growth surpassed four percent for the fourth straight month, indicating stronger growth in recent months.
  • Weekly earnings growth also improved in August, though only slightly (2.48 percent) with weekly hours worked continuing to slow.
  • Weekly hours worked growth (-0.75 percent) has posted negative year-over-year growth since May.

Regional Jobs Index

  • The employment gains seen in August were across all U.S. regions.
  • The South continues to lead small business employment growth, far ahead of the Northeast and Midwest.
  • Improving for the sixth consecutive month, the West jumped 0.71 percent in August. Its index reached 100 for the first time since 2017.

 

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