According to the Paychex Small Business Employment Watch, U.S. employers with fewer than 50 employees continued to expand their workforce in June 2024. While job creation slowed slightly compared to May, hourly earnings growth for small business workers remained steady at 3.16%. The report reflects a period of relative stability for small businesses amid ongoing economic challenges.
- National Jobs Index
- Index Value: 100.29
- Change: A slight decrease from May’s 100.58 and June 2023’s 101.37, indicating slower employment growth.
- Hourly Earnings Growth: Held steady at 3.16% in June, maintaining the moderating trend observed over the first half of 2024.
- Earnings Growth Trends
- One-Month Annualized: 3.04%
- Three-Month Annualized: 2.85%
- Twelve-Month Growth Rate: 3.16%
- Weekly Earnings Growth: Increased by 2.96%, marking a marginal improvement for the third consecutive month.
- Regional Insights
- California: Dropped to the lowest job growth index (99.37), indicating a decline in employment for three consecutive months. The Leisure and Hospitality sector saw the most significant slowdown, with a 2.70 percentage point decrease over the last quarter.
- Sectoral Trends
- Education and Health Services: Increased their rate of small business employment growth, with an index value of 102.18.
- Professional and Business Services: Continued growth with an index value of 100.20.
- Leisure and Hospitality: Ranked last among sectors in California, with a 1.77% decrease in weekly hours worked.
- Challenges for Small Businesses
- Small businesses are navigating complex regulations, a tight labor market, and inflationary pressures, which impact their hiring strategies and operational efficiency.
John Gibson, President and CEO of Paychex, commented on the report, stating, “Small businesses continued to add jobs across the country in June, and there was little change in wage inflation, which reflects relative stability for small businesses. The trends in our wage data over the first half of 2024 are also signaling steady hourly earnings growth heading into the second half of the year.”
He further noted, “While jobs are growing nationally, small businesses in some geographies and industries continue to face a challenging operating environment. We are continuing to see the impact of these challenges in the West region, particularly in California, which came in last among states for job growth in June.”
The June 2024 Paychex Small Business Employment Watch reveals a mixed landscape for U.S. small businesses, with steady job growth and consistent hourly earnings growth juxtaposed against regional and sectoral challenges. As the year progresses, small businesses are expected to navigate these challenges while focusing on strategic hiring and maintaining operational stability.
