U.S. small businesses experienced gains in their employment rates, average compensation and hours worked in June, while revenue figures declined in May, according to Intuit.
The monthly Intuit Inc. Small Business Employment and Revenue Indexes indicated that employment increased by 0.3 percent in June, for an annualized rate of 4.1 percent—the strongest rate of growth that small businesses have seen in the past three months. This equates to approximately 70,000 new jobs created, although Intuit is recalibrating the index and expects these numbers to change.
Average monthly compensation grew by 0.5 percent, or $14, while average monthly hours worked increased by 0.3 percent, or 18 minutes. The employment index is based on data from approximately 80,000 small businesses using Intuit Online Payroll and covers the period from January 2007 through June 23.
The revenue index indicates that small businesses overall saw revenue decline in May. Among the industries tracked by the index, the construction and real estate fields were the only ones to see an increase, which posted 0.5 and 0.1 percent gains, respectively. The index is based on data from approximately 150,000 small businesses using QuickBooks Online and covers the period from January 2005 through May 2012.
"This month's employment figures are strong and indicate more progress to a full recovery than do the revenue figures," said Susan Woodward, the economist who worked with Intuit to create the indexes. "While the revenue figures are disappointing overall, the rise in revenue for the housing-related sectors has been a long time coming and is essential for the full recovery which still eludes us.”
“The rise in compensation and the hourly wage suggest that the labor market for the smallest firms is a bit firmer than it has been for several years," she added. "The low hiring rate, however, indicates that small business employees are not yet feeling too secure and are sticking with the jobs they have. When a full recovery is underway, the small business hiring rate will likely rise as big firms hire people away from small firms, but this is not yet happening."
Small businesses overall saw revenue decline by 0.12 percent in May. Among specific sectors, the accommodation and food services, professional services and health care categories were among those to post declines, while construction and real estate were the only sectors to post revenue increases.
The healthy 0.3 percent gain in small business employment for June strengthens the growth rate of the last several months. As a result, Intuit revised upward the previously reported May growth rate from 0.2 to 0.4 percent. This equates to 75,000 jobs added in May, up from a previously reported 60,000 jobs, though these numbers are expected to change once the index is recalibrated.
Small business hourly employees worked an average of 110.7 hours in June, an increase of 0.3 percent, or around 18 minutes, from the revised figure of 110.4 hours in May, making for a 25.6-hour workweek.
Average monthly pay for all small business employees increased to $2,763 in June, an increase of 0.5 percent, or $14, from the May revised figure of $2,749 per month. The equivalent annual wages would be about $33,200 per year, which is part-time work for almost half of small business employees.
The employment index shows overall employment growth in June for all census divisions except for the West North Central division, which remained flat. Increases were seen in all states statistically significant to the index, with the exception of Pennsylvania, which remained flat. Arizona, Colorado and Maryland recorded the highest rates of growth.
