Job creation among small businesses continued in February, albeit slowly. This slow growth was accompanied by a small uptick in compensation and slight decrease in hours worked.
These are among the results for the Intuit Inc. Small Business Employment Index for February, covering the period between January 24 and February 23. February’s report estimates that small business employment grew by 0.2%, equating to an annual growth rate of 2.9%, and approximately 45,000 new jobs. Intuit plans to recalibrate its Employment Index in the coming months and expects these numbers to be lower. This is a common statistical practice and the recalibration will be based on new data provided by the Bureau of Labor Statistics, which are used as inputs into the Index.
While employment grew slowly in February, average monthly hours worked decreased slightly by 0.04%, or six minutes, and average monthly compensation increased by 0.15%, or $4 per worker.
The Index is based on figures from small businesses with fewer than 20 employees that use Intuit Online Payroll. More information on the index is available at index.intuit.com.
“We saw another month of tepid improvement for small businesses in February, echoing pretty much all of the other indicators of economic activity,” said Susan Woodward, the economist who worked with Intuit to create the Index. “As an overall trend, employment is up modestly, but the number of hours worked by hourly employees is about the same as last month, seasonally adjusted.”
“Compensation is up very slightly in dollar terms, but adjusted for inflation, it is essentially flat. The hiring rate is slightly down on a seasonally adjusted basis, and sits at about half of what it was before the recession was underway. The low hiring rate reflects the reluctance of employees to leave their jobs in such an unsecure job market, so employers do not need to hire to replace them. This phenomenon is present in firms of all sizes, and is not unique to small firms.”
Based on January’s numbers and revised national employment data from the Bureau of Labor Statistics, Intuit revised upward the previously reported January growth rate to 0.3%. This equates to 55,000 jobs added in January, up from a previously reported 50,000 jobs, though these numbers are expected to be lower once the Index is recalibrated.
Slight Decrease in Hours Worked, Increase in Compensation
Small business hourly employees worked an average of 108.5 hours in February, a slight decrease of 0.04% from 108.6 hours in January, making for a 25-hour workweek. Average monthly pay for all small business employees increased slightly to $2,686 in February, an increase of 0.15% from the January revised estimate of $2,682 per month. The equivalent annual wages would be about $32,200 per year, which is part-time work for many small business employees.