Small-business job growth remained consistent in February with the previous month, but hourly earnings growth increased slightly over January, according to a new report from payroll giant Paychex.
While the rate of job growth has stayed relatively consistent over the past three months, the
Overall, though, the numbers for February were fairly consistent with January. “It’s almost like Groundhog Day,” said Frank Fiorille, vice president of risk management, compliance and data analytics at Paychex. “Month to month now, it’s kind of the same story: Hiring in the small business sector is growing, but growing very slowly. Our index number this month was flat. Last month, it was up a little bit. Last year we saw significant consecutive months where it was down slightly. What everybody is saying is it’s hard for small businesses to attract and retain employees that they need to do the work.”
Hourly earnings growth in February improved from January, up 2.50 percent ($0.66), while one-month and three-month annualized growth rates for weekly hours worked were positive in February. As a result, weekly earnings growth also increased for the first time since last summer.
“We saw wages picked up 2.5 percent, which was a nice little increase,” said Fiorille. “We break out the data by high earners, low earners and medium size, in various quintiles. This past month, for the smallest wage earners, in the hospitality and restaurant sector, we saw that growth really jump up. It was almost 4.2 percent. We think that has to do with those 20 states that enacted minimum wage increases January 1. Wages are up, but a lot of it is in the lower-wage segment.”
The South retook the lead among regions in terms of employment growth, while the West was again the leading region in terms of hourly earnings growth. Texas regained its position as the strongest state in terms of small business job growth, while California was again the top state for wage growth. Dallas stayed in first place among metropolitan areas in job growth, while Riverside, California, was again the top metro area for wage growth. The leisure and hospitality sector had the fastest hourly earnings growth among industry sectors at 4.23 percent.
Fiorille expects to see an impact on many small businesses from the tax refunds that taxpayers are getting, or not getting, this month. “There’s been a lot in the news recently about individuals getting less of a refund or no refund at all,” said Fiorille. “We’ll see how that translates into confidence and sales.”
