Small Business Employment Growth Is on the Rise, According to the Paychex
Business Jobs Index
The national index increases for the third month in a row, up 0.39 percent this quarter South Atlantic has strongest one-month gain in more than four years Tennessee continues as the top-ranked state Atlanta ranks as the top metro for the third consecutive month Financial Activities industry sector has best one-month gain.
Small Business Jobs Index continued to increase in February, rising to 100.78, up 0.16 percent from the previous month and 0.39 percent for the quarter. Not only has the national index increased for three consecutive months, but the rate of growth has increased each month as well. The national index, however, is approximately flat to February 2016, up just 0.03 percent.
East South Central continues to lead small business growth among regions, improving its pace 1.83 percent year-over-year, followed by South Atlantic. Tennessee once again leads all states. Top-ranked for the third consecutive month at 103.85, Atlanta spiked 0.93 percent, its best one-month gain in nearly three years. Financial Activities jumped 0.53 percent in February, the best one-month gain among the industry sectors.
“Since November, small business job conditions have shown broad-based improvement as all industries and regions have positive three-month growth rates,” said James Diffley, chief regional economist at IHS Markit.
“After three months of continued small business employment growth, it appears that business optimism following the election is now translating to jobs,” said Martin Mucci, Paychex president and CEO.
National Index Month-to-month changes for the national index have been trending in a positive direction for the past six months, since September. The national index improved 0.39 percent from December to February, the best quarter since early 2014. Currently at 100.78, the national index is signaling positive employment growth, 0.03 percent faster this year versus last.
At 103.41, East South Central continues to lead small business growth among regions, improving its pace 1.83 percent year over year. In contrast, neighboring West South Central is the only region below 100 and is down 1.51 percent from last February. Ranked second among regions, the South Atlantic increased 0.37 percent in February to 102.17, its strongest one-month gain in more than four years. East North Central had the best one-month growth, 0.58 percent, aided by strong movement in the Trade, Transportation, and Utilities industry. Dropping to 100.19, Pacific fell for the seventh time in the past eight months as its index is ranked second to last for the first time since February 2012.
State Employment Eighteen of 20 states now rank above the national baseline, with only California and Illinois below 100. Ranked second behind Tennessee, Georgia spiked 0.93 percent from the previous month to 103.63. With the strongest 12-month growth rate and the second best one-month growth rate, Virginia is ranked third at 102.78. Florida and Washington round out the top five, with index levels above 102. At 102.25, and ranked third among states in October, North Carolina has dropped 10 spots, decreasing 1.74 percent during the last four months.
Top-ranked for the third consecutive month at 103.85, Atlanta had a significant 0.93 percent increase in February, its best one-month gain in nearly three years. At 102.28, small business job growth in Washington is at its strongest level since 2005. Ranked 19th last February, Washington improved 2.52 percent during the past 12 months, climbing to third place among metros. After peaking in October at 105.39, Seattle has dropped 3.24 percent to 102.08 and has fallen out of the top three metro areas for the first time in more than three years. Riverside, CA fell 0.74 percent in February, worst among metros, as its index slipped back below the national baseline.
Financial Activities jumped 0.53 percent in February. With the increase, Financial Activities has a positive three-month growth rate for the first time in 18 months. Up to 101.46, Leisure and Hospitality gained 0.44 percent from the previous month and has the strongest year-over-year growth rate among industries as well. Construction was the only industry to decline in February, down 0.17 percent to 100.95. Construction as a whole has declined1.50 percent during the past 12 months, but in the South, Construction ranks as one of the strongest industries.