Employment and pay at small businesses continued to grow in December, although the number of hours worked by small business employees declined slightly last month, according to QuickBooks maker Intuit.
Intuit found that U.S. small businesses added 30,000 new jobs in December, an increase of 0.14 percent from November, making for more than 860,000 jobs added since March 2010. Small business employees saw a 0.15 percent increase in monthly compensation, with average monthly pay reaching $2,782, up $4 from November.
Hourly employees worked an average of 109.2 hours in December, down 5 minutes, or 0.08 percent, from November’s revised figure.
The Intuit QuickBooks Small Business Employment Index showed an increase of 0.14 percent in December. The Employment Index reflects data from approximately 251,000 small business employers that use Intuit Online Payroll and QuickBooks Online Payroll during the period from Nov. 24 Dec. 23, 2014.
“Intuit’s data shows strong gains in both hiring and hourly wages for small business in December,” said Susan Woodward, an economist who works with Intuit to produce the Small Business Employment and Revenue Indexes. “Less dramatic changes are a rise in total compensation, a decline in hours worked (after a big gain in November), a decline in full-time work, and a rise in the new-hire rate. Nearly all states saw an expansion of small business employment, and most saw compensation rise and hours decline as well.”
The rate of small business employment expansion, 1.7 percent on an annualized basis, is below the 2.8 percent rise last month for the economy overall, Intuit noted. Economy-wide, employment has risen 8 percent since the worst part of the recession, but only 4.4 percent for small business, reflecting the slow recovery of the construction industry, which constitutes a larger proportion of small businesses than of the overall economy.
“A good sign is that wages for hourly workers employed by small businesses rose again,” Woodward said in a statement. “The hourly wage was up at a 3.4 percent rate in December, after a 3.7 percent rise in November. From December 2013 through December 2014, wages increased 2.6 percent. With inflation at 1.3 percent, this represents a real gain.”
Small business employment rose in nearly all states reported individually by Intuit. The states with the largest expansion were Washington, Virginia, Oregon and Nevada, which were all also among the biggest gainers in October and November. States losing small business employment were Michigan, Massachusetts, and Ohio, all of which lost small business jobs in October and November. In most states, hours worked fell but total compensation rose slightly, reflecting the strong rise in hourly wages.
Intuit also released figures on Tuesday from its Small Business Revenue Index for November. Revenues per small business increased by 0.03 percent in November, roughly 3.5 percent when annualized. The Other Services category showed the largest growth, up 0.45 percent. Construction followed with growth of 0.4 percent. The real estate and rental and leasing service sector showed the only decline in November, dropping 0.18 percent. This index is based on data from QuickBooks Online, covering the period from Nov. 1-30.
“Since May 2009, when small business revenues began to expand after the crisis, revenues have grown by 5.8 percent per year, per business,” said Woodward. “The fastest growth over that period was for professional services, at 7.8 percent per year, and the slowest for health care, at 2.6 percent.”
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