The economic news this past week has so far been underwhelming. Orders for durable goods rose less than projected. First quarter economic growth was the weakest in three years. And now, according to payroll service firm Paychex, we learn that small business hiring is slowing down.
Paychex is mostly known for the payroll services it provides to more than 605,000 companies. To say that the company has a lot of payroll data would be an understatement. The firm handles paychecks for one out of every 12 American private sector employees. For years, Paychex, in partnership with research firm Markit has reported monthly on small business employment from its own database. This month its study started including data on wages paid by small businesses. The most recent data shows that employment has stuttered a bit this month…but that wages are creeping up.
The company’s April index took back the hiring gains so far this year and now shows that employment growth is below the same time last year. However, average hourly earnings paid that month were $25.67, a 2.73 percent increase from the prior year.
The best places to find employment are in the southern region of the United States, particularly in the state of Tennessee. Three southern cities – Dallas, Atlanta, and Miami – all led job growth among metropolitan areas by a large margin. States and cities in the Midwest struggled the most.
If you want to get paid more than move west. The western region leads the country in wage increases, with Arizona standing out as the state with the biggest growth trend. California, Indiana, Michigan, New York, Tennessee, and Wisconsin also had strong wage growth. Missouri and Texas were the weakest.
“The decline in the April index mirrors what was reported last month by Bureau of Labor Statistics, which showed deceleration of job growth,” said Martin Mucci, Paychex chief executive and president. “At the same time, the wage report shows continued growth in both hourly earnings and hours worked over the past year.”
The hiring pause could be due to the tight labor market, or small business owners’ continued hesitation to make investments despite numerous polls reporting their confidence. The data does show, however, that we’re willing to pay more to keep people from jumping ship.
Note: Paychex, Inc. is a client of my company, The Marks Group PC. I have received no compensation to write this piece.