Small business wage growth slows in late 2022

Paychex data also reveals steady growth in SME employment.

Rochester, New York, January 3, 2023 /PRNewswire/ — Hourly wage growth for US small businesses continued to fall to 4.95% y/y in December, according to the latest Paychex. IHS Markit Small Business Employment Watch. Additionally, the Small Business Employment Index, which measures national employment growth for businesses with fewer than 50 employees, remained unchanged from the previous month, at 99.38.

“Paychex | IHS Markit Small Business Jobs Index flattened out in December after nine months of easing. Moreover, as the Fed takes steps to fight inflation, hourly wage growth at small businesses has is starting to slow down,” he said. James DiffleyChief Regional Economist, IHS Markit.

“Despite a variety of headwinds, including inflation, staffing challenges, and regulatory changes, small businesses in the United States have continued to be innovative and resilient through the challenges that have presented them since the start of the pandemic. have proven it. John Gibson, Paychex President and CEO. “As we enter 2023, small business owners and their employees are working more hours and finding ways to cope with inflation and rising credit costs.”

In more detail, the December report shows:

• at 99.38, December 2022 The National Employment Index was unchanged from the previous month and remains 1 point higher than the monthly average for the year leading up to the pandemic (March 2019 – February 2020).
• Hourly wage growth slowed to 4.95% y/y in December, the lowest level since then. March 2022.
• Monthly annualized hourly wage growth fell below 4% for the third time in four months.
• At 0.48%, the monthly increase in annual weekly hours was positive for the fourth straight month.
• Leisure and hospitality continue to rank first among sectors in terms of hourly income growth (6.75%) and the lowest in terms of hours worked per week (-0.52%).
• The Southern employment index improved for the third consecutive month, rising to 100.72. The South has led the pace of small business growth among regions over the past nine months.
• Tennessee It will improve by 3.20% in 2022, the highest growth rate of any state.nevertheless Tennessee Ranked lowest among states a year ago December 2021the state currently ranks 7th with 100.34.
• houston (102.75) and Dallas (102.08) has the two strongest employment indices in the metro for the seventh consecutive month.

Paychex solutions reach 1 in 12 US private sector employees, making Small Business Employment Watch an industry benchmark. Based on salary data from approximately 350,000 Paychex clients with fewer than 50 employees, this monthly report analyzes employment and wage trends across the country, and analyzes regional, state, metropolitan and industry sector trends. Investigating activity.

Full December results, including interactive charts detailing all data, are available at www.paychex.com/watch. Highlights are available below.

national employment index

• at 99.38, December 2022 The national employment index was unchanged from the previous month.
• The National Employment Index has fallen 1.54% over the past 12 months, but remained flat in recent months through the end of 2022.

national wage report

• Hourly wage growth over the past 12 months slowed to 4.95% in December, reaching its lowest level since then March 2022.
• This is the third time in the past four months that the one-month annual revenue growth rate has fallen below 4%.
• At 0.48%, the monthly increase in annual weekly hours was positive for the fourth straight month. However, the 12-month weekly growth (-0.27%) remains negative for the 20th straight month.

Regional Employment Index

• The Southern employment index improved for the third consecutive month, rising to 100.72. The South has led the pace of small business growth among regions over the past nine months.
• The West, which ranked first among regions last December at 101.22, will slow by 2.52% in 2022 and now ranks lowest among regions at 98.67.

Regional Wage Report

• The South, at 5.50%, is the only region with hourly wage growth above 5%, the fastest growth in three quarters.
• The South ranked first among regions for revenue growth and had the lowest growth in hours worked last quarter. Conversely, the Northeast ranks last in revenue growth over the past seven months, and he ranks first in work hours growth.
• Weekly earnings growth in the West has slowed sharply over the past two months to 4.48% in December. His one-month annualized weekly earnings growth in the West for November and December was below 2%.

state job index

• north carolina (102.26) and texas (101.96) continues to lead the state in small business employment growth in December.
• of Tennessee The index (100.34) will improve by 3.20% in 2022, the highest growth rate of any state. Tennessee ranked lowest among states in December 2021 It currently ranks 7th with 100.34.
• west coast states Washington (-3.03%) and California (-2.92%) has the lowest 12-month rate of change among states.
• Of the 20 states analyzed, 10 increased and 10 decreased in December.

Note: Analysis is provided for the 20 largest states based on US population.

state wage report

• florida (6.44%) lead the state in hourly income growth, followed by Missouri When texasalso grew by more than 6%.
• Virginia (3.35%) ranks lowest among states for hourly wage growth for the seventh consecutive month.
• I think it was caused by Hurricane Ian. florida, the highest rate in more than two years. For context, Florida’s The result is 2.5 times higher than new jersey at 1.73 percent.

Note: Analysis is provided for the 20 largest states based on US population.

metropolitan employment index

• houston (102.75) and Dallas (102.08) has the two strongest employment indices in the metro for the seventh consecutive month.
• Riverside Its index fell to the bottom of the metro (96.90) as it fell 0.79 percent from last month and 4.48 percent from last year.
• Except for September’s rise of 0.02%, Minneapolis In 2022, it decreased month by month for a total decrease of 4.13%. Minneapolis The 2021 index was 103.63 and the 2022 index was 99.35.

Note: Analysis is provided for 20 metropolitan areas based on US population.

metropolitan wage report

• Miami It outperformed Metro in both hourly revenue growth (6.61%) and weekly revenue growth (6.27%).
• San Francisco ($39.45/hour) and Washington ($38.73/hour) has by a wide margin the highest hourly wage among the big cities, but ranks in the bottom three in terms of growth in December.
• weekly revenue growth in Detroit slowing to 3.09%, weakest in metropolitan areas. Detroit It fell to -1.76%, the lowest level since 2020.
• San Francisco It is the only metro with a positive (0.04%) increase in weekly working hours.

Note: Analysis is provided for 20 metropolitan areas based on US population.

industry job index

• Despite falling 5.32% in 2022, the Leisure and Hospitality Employment Index remained strong at 100.06 and improved slightly again in December.
• Education and Health Services (100.09) is the top-ranked index after other services, boasting the highest 1-month (0.18%) and 12-month (0.30%) change rates among sectors.
• The pace of small business employment growth has been very consistent in the construction sector (98.41), whose index has been between 98 and 99 for the 20th consecutive month.

Note: Analysis is provided for seven major industry sectors.You can find definitions for each industry sector HereThe Other Services (excluding Government) industry category includes religious, civic, and social organizations, and personal services, including auto and home repair, salons, dry cleaning, and other businesses.

industry wage report

• Leisure and hospitality continue to rank first among sectors in terms of hourly income growth (6.75%) and the lowest in terms of hours worked per week (-0.52%).
• Leisure and hospitality are the only sectors to report increased hourly wage growth from November to December.
• Education and health services reported the slowest hourly wage growth for 15 consecutive months at 4.08%.
• Construction is the only sector with a positive increase in weekly hours (0.14%) and has since ranked first among sectors. March 2022.

Note: Analysis is provided for seven major industry sectors.You can find definitions for each industry sector HereThe Other Services (excluding Government) industry category includes religious, civic, and social organizations, and personal services, including auto and home repair, salons, dry cleaning, and other businesses.

For more information on Paychex | IHS Markit Small Business Employment Watch, visit www.paychex.com/watch When Sign up Receive monthly employment monitoring alerts.

* For occupations included in industry data, Bureau of Labor Statistics website.

About Paychex | IHS Markit Small Business Employment Watch

Paychex | IHS Markit Small Business Employment Watch joins Paychex, Inc., a leading provider of integrated human capital management software solutions for human resources, payroll, benefits, and insurance services, and a global leader in critical information and analytics. It is released monthly by an IHS Markit. , and expertise. Focusing exclusively on small businesses with fewer than 50 employees, this monthly report analyzes employment and wage trends across the country, examining local, state, metro and industry sector activity. Based on payroll data from nearly 350,000 of his Paychex clients, this powerful tool provides real-time insight into the dynamics of the small businesses that drive the US economy.

About Paychex

Paychex, Inc. (Nasdaq:PAYX) is a leading provider of integrated human capital management solutions for human resources, payroll, benefits, and insurance services. Paychex combines innovative software-as-a-service technology and a mobility platform with dedicated personal services, enabling business owners to focus on growing and managing their businesses. Backed by 50 years of industry expertise, Paychex currently serves over 730,000 payroll clients. May 31, 2022 United States and Europeand pays 1 in 12 private sector employees in the United States. Learn more about Paychex here. www.paychex.com stay connected twitter When LinkedIn.

IHS Markit (NYSE: INFO) is a global leader in critical information, analytics and solutions for the major industries and markets that drive the world’s economies. The company provides next-generation information, analytics and solutions to business, financial and government customers to improve operational efficiency and deliver deep insights that lead to informed and confident decisions. IHS Markit has over 50,000 corporate and government customers, including 80% of the Fortune Global 500 and the world’s leading financial institutions.Head office location LondonIHS Markit is committed to sustainable and 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
Chris Muller
Peishex Co., Ltd.
+1 585-338-4346
[email protected]
@Paychex

Kate Smith
IHS Markit
+1 781-301-9311
[email protected]

Source Paychex, Inc.