Small Business Employment, Compensation Rise: Intuit Report
Small business jobs rose slightly in June as employers added 45,000 positions to their payrolls. Hours worked and compensation also both increased by 0.2 percent. These were among the results of this month's update of the Intuit Small Business Employment Index, covering the period between May 24 and June 23. The monthly report found that small business employment grew by 0.2 percent in June, equating to an annual growth rate of 2.7 percent.
Since the hiring trend began in October 2009, small businesses have created 820,000 jobs. The Index is based on figures from small businesses with fewer than 20 employees that use Intuit Online Payroll. Based on these latest numbers and revised national employment data from the Bureau of Labor Statistics, the employment growth rate reported for May was revised slightly up to 0.3 percent from 0.2 percent, equating to 60,000 jobs added for the month.
"The small business employment figures we follow look more hopeful this month," said Susan Woodward, the economist who worked with Intuit to create the Index. "Employment is up. Hours worked are up. Compensation and the hourly wage are up, and also the fraction of hourly people working full time is up. Even the hiring rate, which has been flat for a long while, is up a bit. The progress is pretty much national, not confined to just some regions. At the same time, the revised numbers for May look better than we thought so altogether there is more cause for optimism."
Small business hourly employees worked an average of 108.7 hours in June, making for a 25.1-hour workweek. This is a 0.2 percent increase from the revised May figure of 108.4 hours. Average monthly pay for all small business employees was $2,643 per month in June. This is a 0.2 percent increase compared to the May revised estimate of $2,638 per month.
"It's good to see an increase in the number of hours worked," Woodward said. "Last month I was worried when hours worked dipped slightly, so it's reassuring to see this increase. It's not clear what's driving this rise. Other data shows a recovery in both monthly revenues and monthly income for industries involved in a particularly troublesome sector -- housing, including construction and real estate services. These recoveries are consistent with house prices rising, nationally, for the first time in many months."
The equivalent annual wages would be about $31,700 per year, which is part-time work for many small business employees. Roughly 65 percent of small business employees are hourly, and 29.6 percent of them worked more than 140 hours for the month in June, up from 27 percent in May. "Compensation increased this month, enough to move the seasonally adjusted trend to a clear positive region," said Woodward. "Again this is reassuring after seeing little change in compensation for the last few months."
Small business employment by U.S. Census Division continues to grow
in most parts of the country except the East South Central division.
The data reflects employment from approximately 66,000 small business
employers who use Intuit Online Payroll. The month-to-month changes are
seasonally-adjusted and informative about the overall economy. Small
business employment by state is up for most states in which Intuit
Online Payroll has more than 1,000 small business firms represented.