"At 99.98, the Small Business Jobs Index slowed for the fifth consecutive month, falling below the national baseline for the first time since 2011," said James Diffley, chief regional economist at IHS Markit.
"Though job growth has continued to moderate following last year's post-election upswing, wage growth is accelerating at a decent pace," said Martin Mucci, Paychex president and CEO. "We're keeping a close eye on the potential impact of minimum wage increases on job growth and hours worked, as well as monitoring the effects of a tightening labor market."
National Jobs Index
- The baseline index level of 100, represented by the employment growth levels seen during the 2004 base year, equates to moderate job gains
- The pace of small business growth is 0.70 percent slower this July compared to last, mirroring June's year-over-year result.
- The Small Business Jobs Index declined 0.52 percent during the past quarter.
- After slowing late last year, hourly earnings have accelerated in 2017, with annual growth rising from 2.74 percent in January to 2.94 percent in July.
- With hours worked increasing, weekly earnings are up 3.12 percent over last year.
- At 100.66, the South remains the strongest region for small business employment growth, but has decreased 0.94 percent during the past four months.
- Down 0.21 percent year-over-year, the Midwest has the best growth rate among regions. The Midwest also has the only positive growth over its base year, up 0.89 percent.
- Annual wage increases range from 3.70 percent in the West to 2.68 percent in the South.
- Up 2.74 percent year-over-year, the Midwest is the only region to not see an acceleration in hourly earnings growth as it has been relatively flat since April.
- Washington had the only sizable gain in July among states, after declining nine consecutive months. The state continues to show the weakest year-over-year growth, -3.28 percent.
- Tennessee remains the top state for small business job growth with the highest 12-month growth rate, 1.48 percent above last year.
State Wage Report
- With a recent and sizable minimum wage increase in Arizona, hourly earnings are up 5.12 percent year-over-year, far outpacing the second- ranked state, California, at 3.78 percent.
- Weekly hours worked decreased the furthest among states in Arizona, down 0.56 percent from last year.
- Washington is ranked first among states in annual gains for weekly hours and earnings.
Metropolitan Jobs Index
- Though still 0.75 percent below its base-year level, Houston improved for the seventh time in the last eight months to 99.70. With energy markets strengthening, the metro continues to recover from the record low set in November 2016 (96.14).
- At 101.19, Philadelphia is up 0.96 percent from last July. The Philadelphia index ranks third among metros in July and has the best 12-month growth rate.
Metropolitan Wage Report
- Both below two percent, St. Louis and Philadelphia have the weakest hourly earnings annual growth among metros.
- Nearing five percent, Phoenix, followed closely by Riverside, lead hourly earnings growth among metros. Phoenix and Riverside diverge in weekly earnings growth, however, as employees in Phoenix are working fewer hours than last year, while Riverside employees have seen an increase in hours worked.
Industry Jobs Index
- Leisure and Hospitality had the worst one-month and three-month growth rates among industries. Yet, at 100.02, it remains well ahead of its base-year index level.
- At 100.29, Construction edged Education and Health Services (100.28) for second place among metros.
Industry Wage Report
- Leisure and Hospitality is exhibiting strong year-over-year growth in all three wage components; combining hours worked and pay rate, weekly earnings are up 4.95 percent, the best among industry sectors.
- On the other hand, Education and Health Services is lagging in both hourly earnings and weekly hours growth, as weekly earnings are up just 2.70 percent from last July.
