The latest Paychex | IHS Markit Business Employment Watch shows notable increases in jobs growth in March across all four U.S. regions and nearly all states and metros analyzed in the report.
The Small Business Jobs Index increased to 94.25 in March. While the index remains 4.03% below its March 2020 level, last month’s 0.30% increase has been the most significant one-month gain since 2013.
Another leading indicator of economic strength, hourly earnings, reached 2.98%, its fourth month of growth. Weekly earnings also increased, rising to 3.58%, a result of growth in weekly hours worked.
“The Small Business Jobs Index revealed a meaningful increase in March. But there remains much ground to make up,” said James Diffley, chief regional economist at IHS Markit.
“With vaccinations ramping up across the country and business restrictions easing as a result, small business employment growth is starting to move in a positive direction. Increased hiring and wage growth in the leisure and hospitality industry, which was particularly impacted over the past year, are promising signs,” said Martin Mucci, Paychex president and CEO. “The extension of the Paycheck Protection Program for two more months provides additional support as the loans should help qualifying businesses weather remaining challenges resulting from the COVID-19 pandemic.”
The monthly report is compiled from aggregated payroll data of approximately 350,000 clients on the Paychex human capital management (HCM) suite.
The national jobs index uses a 12-month same-store methodology to gauge small business employment trends on a national, regional, state, metro, and industry basis.
In further detail, the March report showed:
- Jobs growth improved in all four U.S. regions in March, as well as in 18 of the 20 states, and 16 of the 20 metros analyzed;
- The South continues to lead all regions in small business job growth;
- Florida remains the top state for job growth;
- Leisure and hospitality saw the greatest improvement among industry sectors, up 1%;
- Leisure and hospitality also saw a significant gain in hourly earnings growth.
National Jobs Index
- The national index gained 0.3% in March, its first significant positive increase in a year;
- The national index remains 4.03% below a year ago;
- The 0.3% increase in March represents the largest one-month gain in nearly eight years.
National Wage Report
- Hourly earnings growth (2.98%) and weekly earnings growth (3.58%) accelerated for the fourth consecutive month;
- One-month and three-month weekly earnings growth are both above 5%, stemming from recent minimum wage increases and gains in weekly hours worked.
Regional Jobs Index
- All four regions improved in March, with the largest gains in the Northeast, up 0.36%;
- The South continues as the leading region for small business job growth;
- The Midwest ranks second and is more than a point lower than the South at 94.5.
Regional Wage Report
- The Northeast leads regions in hourly earnings growth at 4.07%. All other regions are below 3%;
- The South is the only region with negative weekly hours worked growth, which pulled weekly earnings growth down to 2.02%.
State Jobs Index
- 18 of the 20 states analyzed increased in March. Tennessee and Maryland were the only states to decrease;
- Florida leads all states in small business employment growth, with an index of 97.42 and up 0.47% in March;
- Washington lags all states in small business employment growth. At 91.04, it’s more than one point below the next lowest state index, New York at 92.12.
State Wage Report
- Hourly earnings growth continues to be led by Northeastern states, including Massachusetts, New Jersey, and Pennsylvania, all above 4%;
- North Carolina, Texas, and Illinois are the only states with hourly earnings growth below 2%;
- Washington and Massachusetts both have weekly hours worked growth above 1%.