Small business employment growth and compensation picked up in October with a strong uptick in hours worked, according to a new payroll report from Intuit.
Those were among the results of this month's update of the Intuit Inc. Small Business Employment Index. The monthly report found that small business employment grew by 0.2 percent in October, equating to a 2.7 percent annual growth rate. This translates to approximately 44,000 new jobs created nationwide. The Index is based on figures from the country's smallest businesses that use Intuit Online Payroll.
"October's employment numbers look better than they did last month -- employment and compensation show a healthy rise, and hours worked are up sharply," said economist Susan Woodward, who worked with Intuit to create the index. "The annual growth rate for employment will not drive us back to full employment soon, but it is very encouraging. A double-dip recession is looking less and less likely."
Based on Intuits latest data, the employment growth rate for September was revised upward to 0.26 percent growth, equating to 52,000 jobs added and a 3.2 percent annual growth rate. Since the growth trend first began in October 2009, small business jobs have increased by a revised estimate of 530,000.
Total compensation per employee and hours worked resumed their upward trend after being flat in September.
Average monthly pay for all small business employees was $2,617 per month in October, a 0.3 percent increase from the revised September figure of $2,609 per month. This translates to wages of about $31,400 per year.
Small business hourly employees worked an average of 107.1 hours for the month of October, translating to a 24.7-hour work week. That was up by a substantial 0.7 percent from the revised 106.4 hours worked in September, a rise of about 9 percent at an annual rate.
"The increases in compensation and hours worked for October are impressive," Woodward said. "Compensation showed a solid year-over-year increase of about 3.7 percent per year. The extraordinary increase in hours worked may foretell an even stronger rise in employment next month. If small businesses are asking this much more of their people, they probably need more people."
The Intuit Index also breaks down employment by census divisions and states across the country. In October, the West North Central division continued to see job losses, while the East North Central division showed employment growth for the first time in three months.
"It's uplifting to see slightly higher growth rates in small business employment across the U.S.," said Cameron Schmidt, vice president of Intuit's Employee Management Solutions division. "States that saw no growth or job losses last month, like Texas and New Jersey, saw employment growth this month. While we're well aware of the hardship small businesses are facing, our October report shows promise that the small business employment climate is slowly improving.
