From June 24 to July 23, small businesses grew employment by 0.2 percent, equaling an annual growth rate of 2.9 percent, with 50,000 new hires, according to the Small Business Employment Index by Intuit Inc.

Hours worked also grew by 0.7 percent for an 8.6 percent annual rate, and compensation increased by 0.6 percent for the month, resulting in a 7.6 percent annual rate, in July. Since October 2009, small businesses, which are defined by employers with fewer than 20 employees that use Intuit Online Payroll, have added 715,000 jobs. Based on these latest numbers, Intuit revised upward the previously reported growth rate for June to 0.3 percent from 0.2 percent, equating to 50,000 jobs added for the month.

“July’s small-business data cheers me up,” says Susan Woodward, the economist who worked with Intuit to create the Index. “In addition to a steady hiring trend, there is now a solid increase in hours worked and compensation. This means that small business owners are busy, giving their existing employees more work and paying them slightly more.

“At the same time, we see that the hiring rate is up and so is the fraction of hourly people working more than 140 hours per month. When we see the hiring rate go up with roughly the same growth in employment as in previous months, we can infer that people are leaving jobs in small business. This means that small businesses have to find new employees, which is a good sign for activity in the economy overall. The recovery is still slow, but these numbers, when viewed together, show that things are getting better, not worse.”

On average, small-business hourly employees worked 110.2 hours in July, equaling a 25.4-hour workweek. This represents a 0.7 percent increase from June’s 109.5 hours.

“This increase in hours worked is very good news and shows that small businesses have work to do,” Woodward says.

In July, the average monthly pay for all small-business employees was $2,682, a 0.6 percent increase compared to the June’s $2,666 per month. Approximately 65 percent of small-business employees are hourly, and 30.3 percent of them put in more than 140 hours in July, which is up from 30.1 percent in June.

Compensation per employee is up,” Woodward says. “Through many months of this tepid recovery, we saw essentially no movement in either total compensation per employee or the hourly wage. This movement coupled with the rise in employment and the hiring rate means that there is finally competition for workers.”

Additionally, the Intuit Index examines employment by census divisions and states across the U.S.

“For the most part, small-business job growth continues across most of the country,” says Ginny Lee, senior vice president and general manager of Intuit’s employee management solutions division. “While Maryland and the East South Central division continue to show a slight decline in employment, these changes are within the range of random variation and not particularly worrisome. In our data, we also see that hours worked are up across all divisions, another sign that times are getting better for many small businesses nationwide.”

Small-business employment by the U.S. Census Division is growing in most regions of the U.S., except the East South Central division. The figures represent employment from approximately 68,000 small-business employers that use Intuit Online Payroll.

 

 

 

 

 

 

U.S. Census Division

 

 

 

 

Percent Change in Employment

East North Central

 

 

 

 

0.3%

West North Central

 

 

 

 

0.4%

Middle Atlantic

 

 

 

 

0.3%

Mountain

 

 

 

 

0.2%

New England

 

 

 

 

0.3%

Pacific

 

 

 

 

0.3%

South Atlantic

 

 

 

 

0.3%

East South Central

 

 

 

 

-0.1%

West South Central

 

 

 

 

0.2%

Small-business employment by state is increasing for most states, which is reflected by 1,000 small businesses that use Intuit Online Payroll.

 

 

 

 

 

 

 

State

 

 

 

 

 

Percent Change in Employment

Arizona

 

 

 

 

 

0.2%

California

 

 

 

 

 

0.3%

Florida

 

 

 

 

 

0.4%

Georgia

 

 

 

 

 

0.5%

Illinois

 

 

 

 

 

0.2%

Maryland

 

 

 

 

 

-0.2%

Massachusetts

 

 

 

 

 

0.2%

New Jersey

 

 

 

 

 

0.4%

New York

 

 

 

 

 

0.1%

North Carolina

 

 

 

 

 

0.4%

Pennsylvania

 

 

 

 

 

0.5%

Texas

 

 

 

 

 

0.2%

Virginia

 

 

 

 

 

0.4%

Washington

 

 

 

 

 

0.6%