Small businesses increased the pace of hiring and wage growth slightly in March, payroll company Paychex
Meanwhile, hourly earnings growth for workers at U.S. companies with fewer than 50 employees ended the month with 3.27% growth year-over-year, although that was part of a steady deceleration that’s been going on since the middle of 2022.
“There was a little bit of a trend change this month,” said Frank Fiorille, vice president of risk, compliance and data analytics at Paychex. “The growth in the index actually bounced back, which was nice to see for the first time this year. We had seen a gradual slowing in growth rates in employment decelerate for 2024, so this was a little bit of a trend change this year, which was nice to see in the index.”
However, at 100.85, the current national index is still slightly below the mark set in March 2023 at 101.86.
Weekly earnings growth grew 3.05% in March, although weekly hours worked remained down slightly year over year. “On the wage front, we continue to see deceleration due to wage inflation, which we’ve been reporting on and seeing for a long time,” said Fiorille.
The Midwest overtook the South as the highest ranked region of the country, with four of the top five states for small-business job growth being in the Midwest. Indiana led the way among the states on the jobs index at 102.88. All regions and every industry except manufacturing showed positive job growth in March.
“The West region, specifically California, for a very long time has been pretty weak, whether you look at the growth in employment numbers or business formation,” said Fiorille. “This month it bounced back a bit and was much better. California put through a lot of regulatory changes at the end of last year and some are going to go into effect this month, like minimum wage and paid leave.”
As for what accountants should watch for this month, tax season is coming to an end, and there’s still a slim possibility that the Senate will pass the tax extenders bill that is still
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