Job growth increased in September, as did hourly and weekly earnings growth, according to the latest Paychex | IHS Markit Small Business Employment Watch.
At 98.22, the national jobs index experienced its largest gain in three years (0.21 percent), breaking with recent trends; however, the index remains down 0.97 percent year-over-year. In September, hourly earnings growth rose at its fastest one-month pace since 2016 to 2.77 percent ($0.74). Weekly earnings growth continued its upward trend as well, reaching 2.93 percent.
"The national index turned up for the first time since February. While still almost a full percentage point below a year ago, it remains to be seen whether this one-month change marks a turning point," said James Diffley, chief regional economist at IHS Markit.
"Employment and earnings increases in the Construction industry contributed to the encouraging national gains for both jobs and wages in September," said Martin Mucci, Paychex president and CEO. "Increased optimism from business owners in their ability to fill open positions with qualified candidates and raise wages was also reflected in our Fall 2019 Business Sentiment Report, released last week."
Broken down further, the September report showed:
* The South remains first among regions in employment growth; hourly earnings growth in the Northeast hit a decade high.
* Tennessee continues to lead states in small business job growth; Illinois remains the top state for wage growth.
* Dallas is again the top metro for job growth; San Diego maintains its lead among metros in wage growth.
* Recent increases in weekly hours worked growth has sparked weekly earnings; the three-month weekly earnings annualized growth rates are higher than the 12-month rates in every industry.
The complete results for September, including interactive charts detailing all data at a national, regional, state, metro, and industry level, are available at www.paychex.com/employment-watch. Highlights are available below.
See graph here (https://www.paychex.com/employment-watch/#!/news-release/)
National Jobs Index
* The 0.21 percent gain in September is the largest one-month increase in three years, though it only represents a portion of the job growth pace lost since May (0.55 percent).
* The Paychex | IHS Markit Small Business Jobs Index is down 0.10 percent during the past quarter and 0.97 percent during the past year.
National Wage Report
* At 2.77 percent, hourly earnings growth had its biggest one-month increase in more than three years.
* Weekly earnings growth continued its upward trend in September to 2.93 percent, the highest rate since the beginning of 2018.
Regional Jobs Index
* Every region improved in September, with the exception of the West, which is down 0.04 percent from August.
* The South remains the top region for small business employment growth in September.
Regional Wage Report
* All four regions saw weekly earnings growth acceleration.
* Hourly earnings growth in the Northeast hit a decade high in September, 2.94 percent.
* Hourly earnings growth in the Midwest has leveled off at 2.55 percent for each of the past three months.
State Jobs Index
* Tennessee and Texas continue to lead small business employment growth, with indexes above 100.
* Missouri, Georgia, and Illinois each had large increases in September, but remain below 99.
* New York gained 0.47 percent in September; however, its index is below 98 for the seventh consecutive month.
State Wage Report
* Slowing slightly from August, Illinois continues to rank first among states for hourly earnings growth at 4.03 percent.
* Weekly earnings growth increased significantly to 3.90 percent in New York, best among states, with the one-month annualized growth rate topping five percent for the past two months.
Metropolitan Jobs Index
* Dallas and Phoenix remain the top-ranked metro indexes, despite having the largest decreases in September.
* Ranked 19th among metros in March, with an index below 97, Philadelphia surged to third place, following six successive monthly increases, bringing its index to 99.45.
Metropolitan Wage Report
* With weekly hours worked growth turning positive and another minimum wage increase released in July, weekly earnings growth increased in San Francisco to 3.88 percent, best among metros.
* San Diego and Chicago lead metro hourly earnings growth, with rates of 4.02 percent and 4.00 percent, respectively.
Industry Jobs Index
* Manufacturing had the strongest gain among industry sectors, up 0.51 percent, but continues to have the lowest index, 96.39.
* Though essentially unchanged during the past quarter, at 99.12, Construction gained 0.22 percent in September.
* All industries are reporting a slowdown in job growth compared to last year.
Industry Wage Report
* Hourly earnings gains in Manufacturing are approaching the four percent mark, while Construction is steadily improving as well (3.48 percent).
* At $17.56/hour, the hourly earnings rate in Leisure and Hospitality has improved $0.82/hour (4.88 percent) over last year.
* The recent turnaround in weekly hours worked growth has sparked weekly earnings; the three-month weekly earnings annualized growth rates are higher than the 12-month rates in every industry.
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About the Paychex | IHS Markit Small Business Employment Watch
The Paychex | IHS Markit Small Business Employment Watch is released each month by Paychex, Inc., a leading provider of payroll, human resource, insurance, and benefits outsourcing solutions for small-to medium-sized businesses, and IHS Markit, a world leader in critical information, analytics, and expertise. Focused exclusively on small business, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro, and industry sector activity. Drawing from the payroll data of approximately 350,000 Paychex clients, this powerful tool delivers real-time insights into the small business trends driving the U.S. economy.