U.S. small businesses added 15,000 jobs in July, bringing the number of new jobs added over the last six months to more than 90,000. While 610,000 jobs have been added since the small business recovery began in March 2010, small business employment remains 870,000 jobs below its peak in March 2007.
"This month's employment increase shows additional progress." said Susan Woodward, the economist who works with Intuit to create the indexes. "Things continue to get better, but slowly. The jobs added by small business over the most recent six months, including July, are more than double what we saw over the prior six months. Even this rate of increase is slow. Even if small business adds 15,000 jobs a month for a year, small business employment would grow by slightly less than one percent. The job growth for the economy overall for the past year was 1.8 percent. The soft spot in the overall recovery, and particularly for small business, is construction.
"Construction makes up about 5 percent of the overall economy," Woodward said, "but accounts for about 20 percent of small business. New single family housing starts have averaged 950,000 a year since the beginning of 2013, far below the 1.5 million average seen from 1992 to 2008. This past month, new housing starts fell by 92,000 units to 893,000, seasonally adjusted."
The Intuit Small Business Employment Index shows an increase of 0.07 percent in July. The Employment Index reflects data from approximately 237,000 small business employers, a subset of small businesses that use Intuit Online Payroll and QuickBooks Online Payroll. The month-to-month changes are seasonally adjusted and informative about the overall economy.
Hours Worked, Pay Declines Slightly
Hourly small business employees worked an average of 107.2 hours in July, a decline of roughly 0.3 percent, or 18 minutes, translating to a 24.7-hour work week.
Small Business Employee Monthly Hours Worked for hourly employees decreased by 0.3 percent in July. The levels reflect data from approximately 681,000 hourly employees of the Intuit Online Payroll and QuickBooks Online Payroll customer set of approximately 237,000 small businesses and is not necessarily representative of all small businesses. The month-to-month changes are seasonally adjusted and informative of the overall economy.
Average monthly pay for small business employees decreased by 0.2 percent, falling $6 from last month for a total of, $2,708 in July. The equivalent yearly wages would be approximately $32,500. The hourly wage rose just slightly, by 4 cents, reaching $16 for the first time.
Small Business Employee Monthly Compensation for all employees decreased by 0.2 percent in July. This data includes the compensation paid by small business owners to themselves. The levels reflect data from approximately one million employees of the Intuit Online Payroll and QuickBooks Online Payroll customer set of 237,000 small businesses, and are not necessarily representative of all small business employees. The month-to-month changes are seasonally adjusted and informative about the overall economy.
Uneven Employment Growth by State
The increase in small business employment was not even across the country. Among the 40 states that Intuit tracks, 29 showed growth while 11 states saw declines. Idaho and Utah reported the highest increase, at 0.4 percent; for the third consecutive month, Michigan saw the greatest decline in small business employment. While most states saw an increase, employment trends were soft in the Great Lakes and New England regions.
Small Business Employment results were mostly positive for the states in which Intuit Online Payroll and QuickBooks Online Payroll has more than 1,000 small business firms. The month-to-month changes are seasonally adjusted and informative about the overall economy.
Small Business Revenue Slightly Declines
Small business revenue declined by .01 percent in June, which would represent an annualized decline of 0.14 percent over an entire year.
The health care services sector reported the largest decline, where revenues fell 0.18 percent in June. The real estate services businesses saw the largest increase at 0.4 percent the retail, accommodations and constructions industries categories reported larger gains.
This index is based on data from QuickBooks Online, covering the period from June 1-30.
The Intuit Small Business Revenue Index is based on data from more than 150,000 small businesses, a subset of the total QuickBooks Online financial management user base.
About The Intuit Small Business Indexes
The Intuit Small Business Indexes provide unique, near real-time information each month on the activity of the smallest businesses in the U.S. in terms of revenue, hiring and compensation trends. The Employment Index is based on anonymized, non-identifiable aggregated data from approximately 237,000 small business employers, a subset of users that use Intuit Online Payroll and QuickBooks Online Payroll. The Revenue Index is based on anonymized, non-identifiable aggregated data from approximately 150,000 small businesses, a subset of users that use Intuit's QuickBooks Online financial management offering and are matched in Dun & Bradstreet's small business industry classifications. Together, the indexes provide a more complete picture of the economic health of the nation's small businesses. More information on the Intuit Small Business Indexes is available at index.intuit.com.