Despite overall declines in small business jobs and wage growth, the leisure and hospitality sector was a bright spot, showing growth of 3.93 percent. That’s according to Paychex’s latest Small Business Employment Watch survey for the month of June.
Following a small increase in May, the Small Business Jobs Index dipped in June to 99.40, marking a 0.69 percent decrease year-over-year and 12 consecutive months under 100. The pace of annual wage growth moderated, falling to 2.47 percent ($0.64) in June. It is the first time since early 2016 that wage growth has been below 2.50 percent. Weekly earnings growth also slowed slightly to 2.73 percent, while weekly hours worked increased 0.20 percent year-over-year.
“At 99.40, the national index is at its lowest level since 2010, as small businesses are having difficulty hiring in the very low unemployment environment,” said James Diffley, chief regional economist at IHS Markit.
“Despite the tightening labor market conditions, we’re seeing only modest levels of wage growth” said Martin Mucci, Paychex president and CEO. “With the unemployment rate at historic lows, we’d expect to see accelerating wages in this type of employment market.”
Zooming in on the leisure and hospitality sector, hourly earnings growth was well ahead of other areas, at 3.93 percent. That’s just ahead of professional and business services, which saw growth of 2.27 percent. Weekly hours growth, however, slowed slightly, by 0.48 percent year over year.