U.S. small business employment added 25,000 new jobs in June, bringing the total of new small business jobs added since March 2010 to 405,000. In addition, compensation and hours worked also increased during the month. Meanwhile, small business revenues saw an overall decline of 0.4 percent in May, with the exception of the construction industry, which recorded a 0.6 percent increase.
Those are among the findings of the monthly Intuit Inc. Small Business Employment and Revenue Indexes. The report also found that:
- Employment rose by 0.12 percent in June, for an annualized growth rate of 1.4 percent.
- Average monthly compensation increased 0.5 percent in June, with average monthly pay reaching the equivalent of $2,721.
- Average monthly hours worked by hourly employees increased by 0.7 percent in June, which is equivalent to 108.9 hours, up from May's figure of 108.2.
"The gains in small business employment this month are not as large as last month," said Susan Woodward, the economist who worked with Intuit to create the indexes. "However this month's employment gains, paired with the upward revisions for the previous several months, add up to the biggest gains we have seen in small business employment since the recovery began."
"While overall revenues continued to decline, the construction sector remained stronger and continues to see year-over-year revenue growth at 7.3 percent. Despite these declines, per-business revenue across all industries remains at or above pre-recession levels."
The Intuit Small Business Employment Index shows a 0.12 percent increase in employment for June. The Employment Index reflects data from approximately 196,000 small business employers, a subset of small businesses that use Intuit Online Payroll and QuickBooks Online Payroll. The month-to-month changes are seasonally adjusted and informative about the overall economy. The National Employment Index is from the Bureau of Labor Statistics.
Increase in Hours Worked, Compensation Rises
Small business hourly employees worked an average of 108.9 hours in June, making for a 25.1-hour work week. This increase in average monthly hours worked reverses a downward trend that began in mid-2011. By contrast, the hourly wage for hourly employees has been flat in dollar terms for about nine months.
Small Business Employee Monthly Hours Worked for hourly employees increased by 0.7 percent in June. The levels reflect data from approximately 563,000 hourly employees of the Intuit Online Payroll and QuickBooks Online Payroll customer set of approximately 196,000 small businesses and is not necessarily representative of all small businesses. The month-to-month changes are seasonally adjusted and informative about the overall economy.
Average monthly pay for small business employees increased from May to June at $2,721. The equivalent yearly wages would be about $32,600, which is considered part-time work for two-thirds of small business employees in Intuit's data. This jump in compensation is equivalent to a six percent annual rate, which will be difficult for small businesses to sustain, Woodward said.
Small Business Employee Monthly Compensation for all employees increased by 0.5 percent in June. This data includes the compensation paid by small business owners to themselves. The levels reflect data from approximately 910,000 employees of the Intuit Online Payroll and QuickBooks Online Payroll customer set of 196,000 small businesses, and are not necessarily representative of all small business employees. The month-to-month changes are seasonally adjusted and informative about the overall economy.
Small Business Employment Changes Slight and Sporadic
Of the 36 states tracked by Intuit's Small Business Employment Index only 10 showed employment gains, while 25 saw declines and one remained flat. The tri-state area of New York, Connecticut and New Jersey were among the 10 states that saw employment increases, at 0.05, 0.03, and 0.02 percent respectively. The state of New York saw the greatest employment gain, while Kansas saw the greatest decline at 0.16 percent.
By census divisions, the West South Central region, which includes Texas, saw the biggest gain, with an increase of 0.01 percent. Texas also had strong individual state gain, with a 0.02 percent increase in employment.
Small Business Employment results were mixed for the states in which Intuit Online Payroll and QuickBooks Online Payroll has more than 1,000 small business firms. The month-to-month changes are seasonally adjusted and informative about the overall economy.
Small Business Revenue Continues Overall Decline
The May revenue index showed a 0.4 percent drop in overall small business revenue on a per-business basis.
The real estate sector led the decline among industries tracked for the second month, falling 1.1 percent. The retail industry followed with a 0.7 percent drop.
Conversely, construction increased by 0.6 percent. This index is based on data from QuickBooks Online, covering the period from May 1-31.
The Intuit Small Business Revenue Index is based on data from more than 150,000 small businesses, a subset of the total QuickBooks Online financial management user base.