The Paychex Small Business Employment Watch for August, which tracks U.S. small businesses with fewer than 50 employees, reported a decline in hourly wage growth for employees to 2.89%. This is the first time since January 2021 that growth has been below three percent. In addition, one-month annualized hourly wage growth fell to 1.91%. The national small business employment index averaged 100.37 for the eight months of 2024, representing modest job growth.
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According to the August Paychex Small Business Employment Watch, national hourly wage growth is below three percent for the first time since January 2021. (Graphic: Business Wire)
“Our monthly employment and wage reports are based on actual wage and salary data and provide near real-time insight into the status of the small business labor market, which can be a leading indicator of the state of the overall U.S. labor force,” said John Gibson, president and CEO of Paychex. “Our data has shown modest changes in job growth through the eight months of 2024, although employment indexes were below 100 in July and August. This supports broader trends of a cooling labor market and the Fed’s widely reported intention to begin cutting interest rates soon.”
“After remaining stable for several months, hourly earnings growth slowed further in August,” Gibson added. “The fact that growth fell below 3 percent for the first time in three years is another clear sign that the labor market is approaching its pre-pandemic levels.”
Highlights of the employment index and wage data
- The national employment index was 99.89 in August, up 0.02 percentage points from July but remaining just below 100, indicating a nominal year-on-year job loss.
- National growth in weekly hours worked (-0.08%) remained negative year-on-year for the 17th consecutive month, although annual growth was positive for the first time since January.
- The Midwest (100.50) remained the region with the highest small business employment growth for the third month in a row. Indiana (101.87) was again the state with the highest small business employment growth in August and the only state with a positive 12-month rate of change (0.26 percentage points).
- The education and health sector (101.87) remained the industrial sector with the highest employment growth in the country for the third month in a row.
- The West (3.55%) ranked first among regions for the 15th consecutive month and was the only region to report hourly wage growth of over three percent in August.
- For the tenth consecutive month, construction was the sector with the highest growth in hourly wages (3.66%), weekly wages (3.81%) and weekly hours worked (0.27%).
The complete Small Business Employment Watch results for August 2024, including interactive charts with detailed data at the national, regional, state, city and industry levels, are available at www.paychex.com/watch. Learn more and sign up to receive monthly Employment Watch alerts.
About the Paychex Small Business Employment Watch
The Paychex Small Business Employment Watch is published each month by Paychex, Inc. The monthly report focuses exclusively on businesses with fewer than 50 employees and provides analysis of national employment and wage trends, as well as an examination of activity at the regional, state, city and industry levels. This powerful industry benchmark is based on the payroll data of approximately 350,000 Paychex clients and provides real-time insights into the small business trends that drive the U.S. economy. The employment index is scaled to 100, meaning that employment growth at same-store businesses has not changed year over year. Index values above 100 represent new jobs created, while values below 100 represent jobs lost.
About Paychex
Paychex, Inc. (Nasdaq: PAYX) is an industry-leading HCM company that provides a full range of technology and consulting services in human resources, benefits, insurance and payroll. The company serves more than 745,000 customers in the U.S. and Europe and pays one in every 12 American private sector workers. Paychex’s more than 16,000 employees are committed to helping companies succeed and building thriving communities where they work and live. For more information, visit paychex.com.
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Paychex stock at the time of news release with an increase of +0.05 % up to 118.2EUR on the Tradegate stock exchange (September 3, 2024, 2:23 p.m.).
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