The leisure and hospitality industry is leading the economy in terms of hourly earnings growth, according to the latest Small Business Employment Watch research report from Paychex and IHS Markit. According to the report, hourly earnings were up 3.94 percent in the leisure and hospitality sector in September, the most out of all industries.
Overall, the report for September shows the tight labor market continues to restrain job growth, while hourly earnings wage growth and weekly hours worked saw modest increases. At 99.18, the Small Business Jobs Index is consistent with last month’s level, but slowed 0.23 percent during the past quarter, and 0.75 since this time last year. The rate of hourly earnings growth in September stands at 2.33 percent ($0.61), increasing for the first time in more than a year. At 2.65 percent, weekly earnings growth has slowed during the past year. However, weekly hours worked are up year-over-year for the 22nd consecutive month.
“Small business hiring continues to stall; the Small Business Jobs Index dipped slightly again in September, from 99.22 to 99.18, its lowest since 2010. Demand, however, is now not the problem. The unemployment rate was 9.4 percent the last time the index was this low,” said James Diffley, chief regional economist at IHS Markit.
“Businesses are continuing to feel the impact of the tight labor market, and as a result, they are nudging wages higher in order to compete for top talent,” said Martin Mucci, Paychex president and CEO. “Our jobs index indicates slower growth among smaller businesses. Trends show a faster growth rate among larger firms, which suggests they have an edge in hiring right now.”
Broken down further by geography and industry, the September report showed:
- The top regions for employment growth and wage growth, respectively, are the South and West.
- Texas ranks highest among states for jobs growth; Arizona ranks first in wage growth.
- Denver remains first among metros in jobs growth; Phoenix regained the lead in wage growth.
- Leisure and Hospitality remains first among industries for hourly earnings growth.