Small Business Employment Index shows 26,000 jobs added in August; wages and hours worked remained steady.
Small business employment grew slightly in August, but at a declining rate compared to healthy gains made in January through April. While job growth slowed, hours worked and compensation per employee remained steady.
Those were among the findings included in the latest Intuit Small Business Employment Index. The monthly report found that small business employment grew by 0.1 percent in August, equating to a 1.2 percent annual growth rate. The Index is based on figures from the country’s smallest businesses that use Intuit Online Payroll.
The August employment growth translates to approximately 26,000 new jobs nationwide, the same number of jobs added in July based on revised estimates. Since the growth trend first began in October 2009, small business jobs have increased by 340,000.
Wages and hours worked remained essentially steady with marginal increases of 0.06 percent and 0.04 percent respectively.
“As with other economic indicators, these small business figures show signs that the recovery is not progressing as fast as we would like,” said Susan Woodward, the nationally recognized economist who worked with Intuit to create the Index. “In most years, August is a month of unambiguous employment growth, but not this year.”
“Not all signs are soft however – hours are not falling, and compensation per employee is steady. The hiring rate has also not fallen. Overall though, small businesses generally lead big businesses in hiring at the end of a recession, so we would have hoped to see more employment growth in this sector now.”
Compensation, Hours Worked Essentially Unchanged
The data shows that workers made slightly more money and worked a fraction of an hour longer than the month before. Compensation grew by 0.06 percent in August to $2,599 per month, slightly up from a revised estimate of $2,598 per month in July.
Monthly hours increased nominally by 0.04 percent in August to 103.8 hours, about the same as July. This translates to wages of about $31,200 per year for all employees, and a 24.0 hour work week for hourly employees.
“Total compensation per employee is essentially flat again, after rising from late last summer until May of this year,” Woodward said. “Hours worked still show the slight recovery that began late last summer. However, the recovery in hours is not strong, and hours worked is still well below the peak of 105.5 in February 2008.”
Small Business Employment by Geography
The Intuit Index also breaks down employment by census divisions and states across the country.
“Small business employment grew slightly across many parts of the country,” said Cameron Schmidt, vice president of Intuit’s Employee Management Solutions division. “In states where the Index includes more than 1,000 small firms, New York and Virginia saw the greatest growth, while New Jersey saw the greatest decline in employment.”