Since the hiring trend began in October 2009, small businesses have created 540,000 new 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, Intuit revised slightly downward the previously reported growth rate for July to 0.21 percent from 0.24 percent. This equates to 40,000 jobs added in July.
“There was plenty of bad news this month and the Intuit small business employment figures show this,” said Susan Woodward, the economist who worked with Intuit to create the Index. “While employment rose overall, and increased in most of the regions and states that we report on, there are other signs that the small business labor market is weak.”
“Compensation and hours worked fell—which is the opposite of what we saw in July. From this month’s numbers, we don’t see a new recession, but we don’t see a robust recovery either. The labor market for smaller businesses is still soft,” Woodward added.
Decrease in Hours Worked, Compensation
Small business hourly employees worked an average of 108 hours in August, making for a 24.9-hour workweek. This is a 0.3 percent decrease from the revised July figure of 108.3 hours.
Average monthly pay for all small business employees was $2,649 per month in August. This is a 0.08 percent decrease compared to the July revised estimate of $2,651 per month. The equivalent annual wages would be about $31,800 per year, which is part-time work for many small business employees.
“With a soft labor market, employers no longer have to pay more to get help,” said Woodward.
Small Business Employment by Geography
The Intuit Index also breaks down employment by census divisions and states across the country. The Pacific, South Atlantic and West North Central regions posted the largest employment gains at 0.3 percent.
“In contrast to compensation and hours worked, the breakdown by geography tells a more hopeful story,” said Ginny Lee, senior vice president and general manager of Intuit’s Employee Management Solutions division. “Employment is still up in most states and divisions across the country. For the few with declines, they are slight and statistically insignificant.”
Small Business Employment by U.S. Census Division continues to grow in most parts of the country except the Mountain and East South Central divisions. The data reflects employment from approximately 69,000 small business employers who use Intuit Online Payroll. The month-to-month changes are seasonally-adjusted and informative about the overall economy.
