Hourly earnings growth continued for the 11th month in a row at small businesses, payroll giant Paychex reported Tuesday, while small business job growth job growth also stayed strong, but moderated slightly.
Payychex’s national jobs index for April was 101.14, an increase of 2.85 percent from a year ago, but moderated a bit from March by 0.14%. Average hourly earnings stood at $30.10, up 4.85% year-over-year.
“While the index number is close to the all-time highs we hit in January and has been hovering around that number, the growth has been slowing and it slowed again this month a little,” said Frank Fiorille, vice president of risk management, compliance and data analytics at Paychex. “When we dig into it, I don’t really see anything fundamentally changing. It just seems like we’re coming off the boil, but things have been hot for a very long time. The growth slowed mostly in the leisure and hospitality sector, which has been red hot for a long time ever since things came back from COVID.”
Nevertheless, the leisure and hospitality sector continued to lead among the various industry sectors in both small business job growth and hourly earnings growth by a significant margin.
The South reclaimed the top spot for small business job growth by region, while Texas was the highest-ranking state, and Dallas continued as the top metro for the eighth consecutive month. The West and South led the way among regions with hourly earnings growth above 5%, while Ohio and North Carolina had the highest rates of hourly earnings growth, both above 6%.
Paychex plans to issue an extra report and host an upcoming event focusing on the state of Texas. “Texas has been very robust, and Dallas continues to be the best metro area and Texas from the state standpoint,” said Fiorille. “It surpassed North Carolina this month. The South continues to be a very strong region.”
Accountants should be advising clients on how to adjust to the inflationary environment, rising interest rates and the lack of extra stimulus funding.
“The stimulus money, even though that’s been unwound and not coming in anymore, I think consumer balance sheets are still pretty flush with cash,” said Fiorille. “At some point in time, that’s going to change. More people are going to come back and start looking for jobs. It doesn’t seem to be happening right now as much since total employment is still down from pre-COVID.”
