Intuit launches new small business index

Intuit, the company behind QuickBooks and other products like TurboTax, launched the new Intuit QuickBooks Small Business Index, a new monthly indicator of employment and hiring among small businesses in the U.S., Canada, and the U.K.

Developed in collaboration with economist Ufuk Akcigit, the index does not rely exclusively on survey data. Instead, it draws from a sample of anonymized QuickBooks Online Payroll  records, which are then aggregated and normalized against official government statistics before publication using economic models. This means the index can provide a more up-to-date reflection of hiring and employment in the broader small business economy — rather than the QuickBooks customer base — just a few days after small businesses run payroll.

The total sample across all three countries is around 424,000 small businesses: 333,000 in the U.S., 66,000 in Canada, and 25,000 in the U.K. In the U.S. and U.K., the index reflects the population of small businesses with one to nine employees, while in Canada it covers small businesses with one to 19 employees. The index also makes use of external data sources such as the U.S. Bureau of Labor Statistics' Business Employment Dynamics and Job Openings and Labor Turnover Survey; U.S. Bureau of Economic Analysis regions; Statistics Canada Labor Force Survey and regions; and the U.K. Office of National Statistics job vacancy data.

The first such use of the index showed the following:

• In the U.S. last month, small businesses with one to nine employees employed 7,600 fewer people nationally (seasonally adjusted) compared to the previous month, a monthly decrease of -0.06%. Total employment dropped to 12,812,700 jobs.
• The sectors that experienced the largest decrease in employment in the U.S. were Information (-0.6%), manufacturing (-0.33%), and finance and real estate (-0.24%), while employment increased in the utilities (0.56%), natural resources and mining (0.29%), and leisure and hospitality (0.27%) sectors.
• The U.S. region with the largest monthly drop in employment was the Mid-Atlantic (Delaware, District of Columbia, Maryland, New Jersey, New York and Pennsylvania) at -0.18% while employment grew by 0.33% in New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont).

"Small and young businesses are essential for employment and productivity growth," said Akcigit in a statement. "During COVID-19, the U.S. economy experienced a surge in small business growth as many adapted to start new businesses. Employment growth associated with this surge peaked toward the end of 2021 and began to decline at an average monthly rate of roughly -0.15% since then. We're pleased to see the Intuit QuickBooks Small Business Index indicates this downward trend slowed in February 2023 with overall U.S. small business employment declining just -0.06%, continuing to hold well above pre-pandemic levels. As small businesses and their activity continue to be an even larger part of the U.S. jobs market, it makes it even more important we now have a tool like this index that will focus on unearthing timely insights into their employment health overall and within specific sectors and regions."