In contrast to the official government figures from the U.S. Bureau of Labor Statistics, small business employment remained relatively stagnant in October, according to Intuit, increasing only 0.01 percent.
The figures, based on users of Intuit Online Payroll and QuickBooks Online Payroll, indicated nevertheless that the overall small business hiring rate increased to 5.3 percent, the highest level since the recovery from the recession began.
Also on the positive side of the ledger, small business employees were paid more in October on average. They saw a slight increase in monthly compensation, Intuit found, with average monthly pay reaching the equivalent of $2,904, up $17 from September.
Employees also worked considerably more in October. The average number of monthly hours worked by hourly employees was 113.1 hours, an increase of 45 minutes in October. The number of hours worked at small businesses in October was at the highest level Intuit has seen since it began reporting such data back in 2004.
“What we’re seeing in the employment data is small businesses overall are recovering less completely than big businesses are, and in particular last month hiring was flat,” said Susan Woodward, an economist who works with Intuit to compile its monthly Small Business Employment and Revenue Indexes. “But not all the employment news for October is bad. What we can also see is that hours worked for the hourly people were really up very strongly, so much so that I can’t imagine they won’t be hiring next month. October was the third month in a row that hiring was flat, but hours worked were way up.”
Woodward noted that the percentage of people who are working full-time was up somewhat as well, although wages are a different story.
“Wages are right on track with the rate of inflation,” she said. “There’s no increase in real wages. But compensation overall was up, which suggests that it wasn’t the hourly people who got the increases in compensation. It was the business owners and the non-hourly people.”
Intuit also released figures for September showing a slight decline in revenue for small businesses, based on small businesses using QuickBooks Online. Small business revenue overall dipped 0.3 percent across all industries. Real estate, rental and leasing businesses showed the largest decrease in monthly revenue, falling 0.7 percent. Construction businesses posted the largest revenue increase in August, with revenues rising 0.4 percent. In contrast, revenue for professional, scientific and technical services businesses declined 0.2 percent in September, or even more when looked at an annual rate.
“The sector where accountants would be, professional services, their revenues were down at a 2.9 percent annual rate in September,” said Woodward.
Why the lag in revenue numbers? “We’re just like the government,” Woodward explained. “We have more timely data on employment than we do on accounting, and that’s because in employment every time somebody gets paid, a record gets created and we can see it, whereas the customers are entering their accounting numbers themselves into QuickBooks. It takes a little longer for it to be complete enough to interpret. Even with the federal government the GDP numbers come out a month later than the payroll numbers do.”