Jobs Index Indicates Tight Labor Market for Small Businesses Continues

The latest data from the Paychex | IHS Markit Small Business Employment Watch reveals that the tight labor market for small businesses in the United States continues. The report shows that hourly earnings growth has slowed to 3.79% in September 2023, a pace not seen since September 2021. Additionally, the Small Business Jobs Index, which measures the rate of small business job growth, experienced a -0.21% change from August, reaching 98.89 in September.

According to James Diffley, chief regional economist at S&P Global Market Intelligence, the cooling wage inflation and the dip in the jobs index are not indicators of a recession but rather reflect a tighter supply of available workers. This suggests that small businesses are facing challenges in finding qualified employees due to a lack of worker supply, rather than a lack of hiring demand.

John Gibson, President and CEO of Paychex, stated that small businesses are managing their organizations in a tight labor market and are adding workers at a sustained but modest rate. He emphasized the importance of small businesses seeking guidance from trusted partners like Paychex to effectively attract and retain talent in this environment.

The Paychex | IHS Markit Small Business Employment Watch draws from the payroll data of approximately 350,000 Paychex clients with fewer than 50 employees, making it an industry benchmark. The report provides analysis of national employment and wage trends, as well as regional, state, metro, and industry sector activity.

For more detailed information and interactive charts, the complete results for September 2023 can be found at www.paychex.com/watch.

About Paychex:
Paychex, Inc. is a leading provider of payroll, human resource, insurance, and benefits outsourcing solutions for small-to-medium-sized businesses. With approximately 740,000 customers in the U.S. and Europe, Paychex serves as a trusted partner to help businesses succeed and build thriving communities.

About S&P Global Market Intelligence:
S&P Global Market Intelligence is a division of S&P Global, a provider of credit ratings, benchmarks, analytics, and workflow solutions in global markets. Their team of experts delivers insights and data solutions to help organizations navigate the economic landscape and make informed decisions.

In conclusion, the latest data from the Paychex | IHS Markit Small Business Employment Watch highlights the ongoing challenges faced by small businesses in the tight labor market. Despite the cooling wage inflation and a slight dip in the jobs index, small businesses are continuing to add workers at a modest rate. Seeking guidance from trusted partners like Paychex can assist small businesses in effectively navigating the current labor market conditions.