Although revenue figures are down, U.S. small businesses are experiencing higher employment numbers, average compensation and hours worked, according to the Small Business Employment and Revenue Indexes by Intuit Inc.
In fact, small-business employment rose 0.3 percent in June, reaching an annualized rate of 4.1 percent, which is the strongest growth rate that respondents have faced in the last three months. This represents approximately 70,000 new jobs created; however, Intuit is recalibrating the index and expects these numbers to change.
Average monthly compensation increased by 0.5 percent, totaling to $14, while average monthly hours worked increased by 0.3 percent at 18 minutes.
According to the revenue index, small businesses experienced revenue declines in May by 0.12 percent. The construction and real estate sectors were the only ones to see an increase with 0.5 and 0.1 percent gains, respectively while the accommodation and food services, professional services and health care industries all fell.
“This month’s employment figures are strong and indicate more progress to a full recovery than do the revenue figures,” says Susan Woodward, the economist who partnered with Intuit to create the indexes. “While the revenue figures are disappointing overall, the rise in revenue for the housing-related sectors has been a long time coming and is essential for the full recovery, which still eludes us. The rise in compensation and the hourly wage suggest that the labor market for the smallest firms is a bit firmer than it has been for several years. The low hiring rate, however, indicates that small-business employees are not yet feeling too secure and are sticking with the jobs they have. When a full recovery is underway, the small-business hiring rate will likely rise as big firms hire people away from small firms, but this is not yet happening.”