Small business job growth index up slightly in August
An index of small business employment growth inched up as Main Street America added jobs at a steady pace this month.
The Paychex IHS Small Business Jobs Index rose 0.02 percent from July to a reading of 100.70, in line with the year-to-date average for 2016. A measurement above 100 indicates job growth.
Paychex president and CEO Martin Mucci said some caution is seeping into labor markets ahead of the presidential election and as business owners juggle new health-care and minimum-wage regulations and prepare for the launch of overtime rules in December.
“These are all putting a little bit of caution on adding jobs, particularly in small business, but overall, it’s consistent and it’s steady and it’s good numbers,” he told CNBC’s “Squawk Box.”
The Mountain region edged out the South Atlantic to claim the top spot for small business job growth among nine U.S. Census Bureau divisions. For the month, the Mountain region’s index reading was up 0.17 percent to 101.95.
While all nine regions had readings above the national baseline of 100 in August, Mucci said small business hiring is shaping up as “a tale of two coasts.”
“We have the West Coast really dropping off pretty good and strongly in California where they reached a peak in ’14, and now the East Coast picking up very strong,” he said.
Washington remained top of the list among states with a reading of 104.30, and Seattle increased its lead over other U.S. cities, registering the strongest one-month gain.
Paychex and IHS found little change in industry activity, after small business jobs growth eased in eight of the nine industries the index tracks the previous month. Business activities showed the best gain, rising 0.23 percent from the previous month.
“The other services sector is still by far the strongest, and these are discretionary services, you know, pet care, personal care,” Mucci said. “Unfortunately some of those are part time.”
The Paychex IHS index measures same-store, year-over-year changes in worker count to determine trends in employment. Paychex is an outsourcing solutions firm, and IHS provides information and analysis.
The report comes three days before the Labor Department releases its closely watched monthly U.S. jobs data on Friday.