Job and wage growth continued at a moderate pace among small businesses in October, likely slowed by the impact of recent hurricanes down south, according to payroll company Paychex.
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Hourly earnings growth in October was 3.02%, while weekly earnings growth remained below 3% for the ninth month in a row, the lowest level since August 2021.
The October report was affected by multiple hurricanes, including Hurricane Helene in late September and Hurricane Milton in October. The jobs index in Florida (99.62) fell below 100 for the first time since March 2021, including a 1.81 percentage-point decrease for Tampa (97.91), which ranked in last place among the top U.S. metropolitan areas for the month. North Carolina (99.80) dropped 1.13 percentage points and eleven spots in the state rankings for October.
“You can see the impact on the hurricanes in North Carolina and Florida,” said Frank Fiorille, vice president of risk, compliance and data analytics at Paychex. “Tampa has always been a really strong metro and was dead last, so we definitely saw that impact from an index standpoint.”
However, the data is already pointing to a bounce back in hiring since the hurricanes. “Small business job growth actually is pretty strong in those areas as they try to rebound,” said Fiorille. The data isn’t pointing to much change on wages, with hourly earnings growth just above 3%. National hourly earnings growth increased marginally to 3.02% in October, while three-month annualized hourly earnings growth has been reported below 3% for the past six months. Weekly hours worked growth (-0.20%) across the U.S. remained negative year-over-year for the 19th month in a row.
The Midwest (100.79) gained 0.40 percentage points in October and remained the top region for small business employment growth for the fifth consecutive month. Strong gains in education and health services across top-ranked Indiana, Michigan, Ohio, and Wisconsin contributed the most to job growth in the region.
“We’re seeing a little bit of a comeback in construction too, which is nice to see, because that one throws off so much second derivative impact on other businesses starting up and jobs from construction, so we always watch that very closely,” said Fiorille. “From a regional standpoint, we continue to see the Midwest be strong. Although we typically have been reporting the coasts have been pretty soft, we saw a little bit of a rebound in California, which was nice to see as well.”
In the month ahead, accountants and their small business clients will be looking warily at the aftermath of the election. “Everybody is waiting with bated breath to see what happens from the elections,” said Fiorille. “Not just the presidency, but what happens in Congress is going to be key.”
He warned there could be legislation during the lame duck session in Congress after the election that could result in last-minute changes at the end of the year.
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