Small business wage growth dipped in October

Small business wage growth dipped in October Growth in hourly and weekly pay at small businesses decelerated in October as job growth moderated, payroll provider Paychex reported. According to the Paychex | IHS Markit Small Business Employment Watch, the Small Business Wage Growth Index dipped to 2.52% year-over-year growth rate in October, down from 2.53% in September. The national index also fell to 2.39% from 2.46%. Despite the decline, wage growth remained above the 2.5% threshold for the second consecutive month. Hourly earnings growth has been relatively stable, maintaining a year-over-year increase of 2.52% for five consecutive months. There was a similar trend in weekly earnings growth, which stood at 2.58% in October, down slightly from 2.61% in September. Ian Madrigal, vice president at Paychex, said that even though wage growth has moderated over the past few months, it is still "remaining relatively strong" compared to previous years. This is likely due to the tightening labor market and increased competition for talent. Small business job growth also slowed in October, with the Small Business Jobs Index dropping 0.11% to 98.11. Despite the decline, it remains above the baseline level of 100, indicating a small increase in job growth. The report noted that employment growth has been consistently positive, though at a slower rate compared to previous years. The rate of employment growth has also been slowing since July 2018, reflecting the overall deceleration in job growth. Madrigal stated that the slight decline in job growth can be attributed to a variety of factors, including the ongoing trade disputes and uncertainty about the global economy. These factors may be causing small businesses to be cautious in their hiring decisions. In addition, the report found that the Leisure and Hospitality industry experienced the strongest job growth in October, followed by the Education and Health Services sector. However, the Construction and Manufacturing sectors saw declines in employment growth. Geographically, the Mountain region had the highest small business job growth rate, while the Middle Atlantic region saw the slowest growth. The report also highlighted regional variations in wage growth, with the West North Central region experiencing the highest hourly earnings growth. Despite the recent moderation in wage and job growth, small businesses continue to face challenges in finding and retaining employees. The tightening labor market has made it difficult for employers to attract qualified candidates, leading to increased competition for talent. To overcome these challenges, small businesses may need to focus on improving their recruitment and retention strategies. This could include offering competitive wages and benefits packages, providing opportunities for professional development, and creating a positive work environment. In conclusion, small business wage growth dipped in October as job growth moderated. However, wage growth remained relatively strong compared to previous years, reflecting the tightening labor market and increased competition for talent. While small business job growth also slowed, it remained positive, indicating a small increase in employment. To overcome challenges in finding and retaining employees, small businesses should focus on improving their recruitment and retention strategies.