Intuit Monthly Small Business Index Shows Increase in Wages and Hours After Being Flat Since Fall 2008
Small business employment grew by 0.33 percent in April, equating to a 4 percent annual growth rate, according to the latest Intuit Inc. (@intuit) Small Business Employment Index (#SMBindex). This translates to approximately 66,000 new jobs in April and roughly 300,000 new jobs since June 2009, when the upward trend in employment began.
Intuit Small Business Employment Index
Intuit released the monthly report, based on figures from the country’s smallest businesses who use Intuit Online Payroll, at the Intuit Small Business Town Hall at the Nasdaq Center in New York.
The Intuit Small Business Employment Index shows increasing employment since mid-2009, reversing a downward trend that dates back to 2007. The employment index reflects data from approximately 55,000 small business employers who use Intuit Online Payroll. The month-to-month changes are seasonally-adjusted and informative about the overall economy. The National Employment Index is from the Bureau of Labor Statistics.
(Click to View Full Size Version of the Small Business Index Chart)
The data also shows increases in compensation and hours worked after remaining flat since fall 2008. Compensation grew by 0.5 percent in April and now is $2,607 per month, compared to $2,595 per month in March. Monthly hours worked were up by 0.5 percent in April, to 105.7 hours compared to 105.1 in March. This translates to wages of about $31,300 per year for all employees and a 24.4-hour work week for hourly employees.
“Small businesses are looking healthier,” said Dr. Susan Woodward, the nationally-recognized economist who worked with Intuit to create the index. “Every trend we measure – employment, hours worked, and monthly compensation – is showing signs of a recovery. Last month the national figures finally began to show a recovery for larger businesses and the entire economy, but for small businesses, the recovery has been underway for more than half a year.”
The recently-launched monthly index includes aggregate and anonymous employment data from approximately 55,000 small businesses with fewer than 20 employees. These small firms use Intuit Payroll Services, the No. 1 provider of payroll software with more than 1 million customers. More information is available at: www.intuitinc.com/payrollindex.
“It’s heartening to see that not only are small businesses hiring but they are also increasing hours worked and compensation,” said Cameron Schmidt, vice president of Intuit’s Employee Management Solutions division.
Compensation and Hours Worked
Small Business Employee Monthly Compensation for all employees shows compensation rising in April 2010, after being primarily flat since fall of 2008. This data includes the compensation paid from small business owners to themselves. The levels reflect data from approximately 220,000 employees of the Intuit Online Payroll customer set of 55,000 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.
Compensation per employee had remained flat since the fall of 2008. In April, compensation per employee grew strongly on a seasonally-adjusted basis, and the trend indicates signs of a recovery supported by solid gains in April.
Small Business Employee Monthly Hours Worked for hourly employees are up in April 2010. The levels reflect data from approximately 140,000 hourly employees of the Intuit Online Payroll customer set of approximately 55,000 businesses, and are not necessarily representative of all small businesses. However, the month-to-month changes reflect what is shown in Federal employment data for small businesses when there are corresponding time ranges leading us to believe that they are informative about the overall economy.
“Like total compensation, hours worked in April are up strongly, on a seasonally-adjusted basis,” said Woodward. “People made more money because they worked more hours. Indeed, hours worked appear to be the strongest since before the recession began.”
About the Index
The Intuit Small Business Employment Index is based on aggregate and anonymous online employment data from approximately 55,000 small business employers with fewer than 20 employees who use Intuit Online Payroll. These smallest employers comprise 87 percent of the total U.S. private employer base. Intuit reports data for three categories: small business employment, compensation and hours worked. Intuit will analyze and publish the data at the beginning of each month. As new data arrive, the index numbers may be revised, as with government data.
While the Intuit Small Business Employment Index offers macroeconomic insight about the economy generally, it does not indicate or represent changes in Intuit’s business results for any period.
The Index data reflects monthly employment activity in small businesses, and is adjusted to account for changes in Intuit’s Online Payroll customer base. The percent change is measured monthly using the change in employment for existing Intuit Online Payroll customers from one month to the next. The set of customers changes each month so the measurement is the change, for each pair of months, for customers who are present in both the earlier and the later month.
Further information about the Intuit Small Business Employment Index including the methodology is available at: www.intuitinc.com/payrollindex.
About Intuit Town Hall
This year’s Intuit Town Hall, the second in a series, shifts focus from recession to recovery. Held in New York City, the sessions included consumers, small business owners, high school students and financial experts who discussed how to survive and thrive in the “recovery” economy. More information can be found at www.intuittownhall.com or on Twitter @IntuitTownHall.
Intuit Small Business Employment Index: www.intuitinc.com/payrollindex
Intuit Payroll: www.payroll.intuit.com
Intuit Payroll Blog: www.intuitpayrollblog.com
Intuit Payroll on Twitter: www.twitter.com/IntuitPayroll