Small business employment and hours worked continued to grow in February, but the level of wages generally remained flat, according to figures from Intuit.
The monthly Intuit Small Business Employment Index found that small business employment grew by 0.3 percent in February, equating to an annual growth rate of more than 3 percent. This translates to approximately 50,000 new jobs created nationwide. The index is based on figures from the country’s smallest businesses that use Intuit Online Payroll.
“This month’s report is a lot like last month’s,” said Susan Woodward, the economist who worked with Intuit to create the Index. “Small businesses are hiring and their people are working more hours, but measures of compensation are pretty flat, showing that the labor market is still soft. While the rise in employment is good news, this rate of increase is still not going to get us back to full employment very fast.”
Based on the latest data, the employment growth rate for January was revised down slightly to just under 0.3 percent, equating to 60,000 jobs added for the month and a 3.5 percent annual growth rate. Since the growth trend first began in October 2009, small business jobs have increased by a revised estimate of 800,000.
Small business hourly employees worked an average of 107.6 hours in February, translating to a 24.8-hour work week. This is a 0.1 percent increase from the revised January figure of 107.5 hours.
“Hours worked continue to go up, which is another good sign,” Woodward said. “Based on other analysis we have done on the data, we think that we are seeing higher hours because small businesses are increasing the fraction of their hourly workers who work full time. Hours worked are up about 3 percent over the last year.”
Average monthly pay for all small business employees was $2,612 per month in February, a 0.1 percent decrease, which is essentially flat, compared to the January revised estimate of $2,614 per month. This translates to wages of about $31,300 per year, which is part-time work for many small business employees.
“Compensation and the hourly wages for hourly workers are essentially flat as they were last month, and have been for a year,” continued Woodward. “This is a sign that the labor market is still soft. Small businesses are hiring, but they do not have to pay up to get people.”
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