Paychex sees small business employment boost in February
Paychex found an increase for the third month in a row in small business employment in a further sign of improving optimism among business owners.
The Paychex | IHS Small Business Jobs Index, which the payroll giant compiles with the research firm IHS, continued to rise in February, climbing to 100.78, up 0.16 percent from the previous month and 0.39 percent for the quarter. The rate of growth has increased each of the three months as well. The national index, however, is relatively flat compared to last February, where it’s up just 0.03 percent for the year.
“The last two months we were looking at great optimism,” said Paychex president and CEO Martin Mucci. “The consumer confidence numbers and the NFIB [National Federation of Independent Business] business index were all very positive, but we weren’t very sure if it was really translating into jobs. Now we’ve seen consistently the last three months, we’re up almost 0.4 percent in small business hiring. That’s the best three months we’ve seen in three years. It does look like the optimism is actually translating into more jobs for small businesses.”
The East South Central region of the country continues to lead the way in small business growth, increasing 1.83 percent year-over-year, followed by the South Atlantic region. Tennessee again led the rest of the states. For metropolitan areas, Atlanta ranked at the top for the third consecutive month, increasing 0.93 percent to 103.85, its best one-month gain in nearly three years.
“Generally the strongest areas are still in the Southeast, and the East South Central and South Atlantic are still holding the top spots,” said Mucci. “The South Atlantic, in fact, was up in February. It was the strongest one month in probably four years, and construction is still the big thing in the South. In the rest of the country, construction seems to be slowing down, but both residential and commercial construction in the Southeast continues to be good. Statewise, Tennessee continues to hold the top spot. Nashville is becoming more of a tech hub for some jobs.”
The financial activities sector grew 0.53 percent in February on Paychex’s index, the best one-month gain among the various industry sectors, although the leisure and hospitality industry had the strongest year-over-year growth rate, and the Other Services category also continued to perform strongly in February. “Maybe people are getting more confidence and putting more money into the market, which is fueling the increase, and then that’s improving some of the finance-related jobs as well,” said Mucci.
Accountants may want to advise their clients on how to deal with the rapidly rising stock market and the changes in the health care law and regulatory reforms under the Trump administration.
“When you see a new administration like this looking to make a lot of changes in regulations, I think accountants are going to be very busy over the next few months helping their clients in explaining the Affordable Care Act changes that were just proposed last night, the changes in tax reform that look like they are coming up, and changes in interest rates,” said Mucci. “Does that change how they invest or should they borrow earlier than later? I think when you see this administration and the number of changes they want to make, accountants are going to be extremely busy as the trusted advisor of their clients.”