The leisure and hospitality sector had the strongest hourly earnings growth in July, according to the latest Small Business Employment Watch from Paychex and IHS Markit. The report showed a 4.52 percent increase in hourly earnings for the sector, although a significant decrease in weekly hours worked brought weekly earnings growth down nearly a full percent (3.57 percent).
Overall, the small business report showed a slight decline in job growth and a fourth consecutive month of accelerated wage growth. The national jobs index stands at 98.18, down 0.15 percent from last month and 1.18 percent below its pace in July 2018, Paychex said. The deceleration in job growth follows a 0.45 percent decrease in June. Hourly earnings growth reached its strongest rate in more than a year at 2.70 percent in July, and weekly earnings growth improved to 2.57 percent. Additionally, one-month annualized growth for weekly hours worked, up 1.19 percent, is the highest it’s been since 2017.
“The further decline of the jobs index to 98.18 in July validates the sharp fall in small business employment growth seen in June,” said James Diffley, chief regional economist at IHS Markit, in a written statement.
Also in July, the South remained the top region for employment growth, while the West led regions in hourly earnings growth. Texas was the best state for small business job growth, with Dallas again being the top metro area for job growth. Illinois and San Diego were the top state and metro area, respectively, for wage growth.
The financial sector was the only industry to increase the pace of job growth in July, Paychex said.