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Intuit Indexes: Small Business Employment Declined Since May; Revenues Fall For Seventh Consecutive Month

Stocks in this article: INTU

“The absence of a strong rise in small business employment during the recovery reflects two forces,” said Woodward. “First, while construction shows some recovery, residential construction activity remains far below where it was in 2006. Second, small business employment has been a declining share of private sector employment for at least 60 years. The decline tends to be abrupt in recessions and slower the rest of the time. The jobs lost are primarily non-manual routine work, such as word processing and checkout services in retail. These jobs are also lost in larger firms, but small businesses start with more of these jobs and thus lose more.”

October’s employment index is based on data from Intuit Online Payroll and QuickBooks Online Payroll, and covers the period from Sept. 24 through Oct. 23.

Decrease in Hours Worked and Compensation

Small business hourly employees worked an average of 107.1 hours in October, a decrease of 0.7 percent, or about 42 minutes, from the revised figure of 107.8 hours in September, making for a 24.7-hour workweek.

Average monthly pay for small business employees dropped to $2,791 in October, or 0.1 percent, from the September revised figure of $2,794 per month. This equates to a decrease of $3–down from the growth of $17 seen from August to September. The equivalent annual wages would be about $33,500 per year, which is part-time work for many small business employees.

Small Business Employment by Geography

The Employment Index showed mixed growth in the U.S. census divisions, with decreases in all regions except the Pacific, Mountain and West South Central divisions, which saw growth, and the West North Central region, which remained flat. A state-by-state breakdown showed the largest employment increases in Arizona, Indiana and Texas, while Oregon, Louisiana and Michigan saw the largest decreases.

U.S. Census Division   Percent Change in Employment
East North Central   - 0.03%
West North Central   0.0%
Middle Atlantic   - 0.04%
Mountain   + 0.04%
New England   - 0.06%
Pacific   + 0.01%
South Atlantic   - 0.02%
East South Central   - 0.02%
West South Central   + 0.05%

Small Business Employment by U.S. Census Division is mixed in most parts of the country. The data reflects employment from approximately 170,000 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.

State   Change in Employment (%)
Alabama   +0.08
Arizona   +0.13
California   +0.02
Colorado   +0.05
Connecticut   -0.08
Florida   0
Georgia   +0.01
Illinois   +0.01
Indiana   +0.11
Kansas   +0.03
Louisiana   -0.10
Maryland   +0.08
Massachusetts   -0.03
Michigan   -0.09
Minnesota   +0.02
Missouri   +0.05
Nevada   -0.01
New Jersey   -0.01
New York   -0.02
North Carolina   -0.08
Ohio   -0.05
Oklahoma   +0.08
Oregon   -0.11
Pennsylvania   +0.01
South Carolina   -0.04
Tennessee   -0.05
Texas   +0.11
Utah   +0.04
Virginia   -0.04
Washington   -0.01
Wisconsin   0

Small Business Employment increased for most 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 Index

Small business revenue overall fell by 0.3 percent in September. Since February 2012, small business revenues have declined by 2.5 percent, equating to an annualized decline of 4.3 percent.

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