Intuit Small Business Employment Index Shows 0.3 Percent Job Growth for January
70,000 New Jobs Created; Hours Worked Up Strongly with Slight Increase in Wages
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- Small business employment continued to show encouraging growth in January, with hours worked showing a strong increase as wages grew slightly.
These are among the results of this month's update of the Intuit Inc. (Nasdaq:INTU) Small Business Employment Index. The monthly report found that small business employment grew by 0.3 percent in January, equating to an annual growth rate of more than 4 percent. This translates to approximately 70,000 new jobs created nationwide. The Index is based on figures from the country's smallest businesses that use Intuit Online Payroll.
"A substantial fraction of the new jobs in the recovery have been created by small businesses," said Susan Woodward, the economist who worked with Intuit to create the Index. "This month's numbers are stronger than last month and they look better in every category. These job gains contrast sharply with mild job gains for the overall economy. As small businesses generally recover sooner than big businesses, this continued growth is quite encouraging for economic recovery."
Based on this latest data, the employment growth rate for December was revised upward to 0.4 percent, equating to 80,000 jobs added for the month and a nearly 5 percent annual growth rate. Since the growth trend first began in October 2009, small business jobs have increased by a revised estimate of just over 1 million.
Hours Worked Up Strongly; Slight Increase in Compensation
Small business hourly employees worked an average of 108.1 hours in January, translating to a 24.9-hour work week. This is a 0.6 percent increase from the revised December figure of 107.4 hours.
"It is not just the employment figures that are encouraging," Woodward said. "Hours worked for hourly employees are also up strongly after remaining flat at just under 104 hours per month for most of 2009 and early 2010. It's now at 108 hours per month and what's exciting is that our other data is showing a rise in people working full time at small businesses. Small businesses now employ 22.5 percent full-time employees, compared to a low of 20.4 percent back in January 2010."
Average monthly pay for all small business employees was $2,619 per month in January, a 0.3 percent increase from the December revised estimate of $2,612 per month. This is just over 3 percent at an annual rate. This translates to wages of about $31,400 per year, which is part-time work for many small business employees.
"While compensation is up slightly in January, it still reflects a slack labor market with compensation for all employees up only 1 percent over the last year. At an hourly rate, this month's average pay for small business employees equals about $15.30 per hour, the same as a year ago. This is still well below the national average of about $20 per hour. This reflects that small businesses use more part-time people than big businesses do and pay them less."
Small Business Employment by Geography
The Intuit Index also breaks down employment by census divisions and states across the country, with growth in most regions.
"All divisions continued to show employment growth except for the West North Central division, which continued to see job losses for the seventh month in a row," said Cameron Schmidt, vice president of Intuit's Employee Management Solutions division. "Most states saw increases in employment, with New Jersey achieving the strongest growth over the last four months. This is an about face from last spring and summer when New Jersey was shedding the most jobs."
U.S. Census Division Percent Change in Employment East North Central 0.1% West North Central -0.1% Middle Atlantic 0.2% Mountain 0.2% New England 0.3% Pacific 0.4% South Atlantic 0.3% East South Central 0.3% West South Central 0.5%
Small Business Employment by U.S. Census Division continues to grow in most parts of the country except for the West North Central division. The data reflects employment from more than 58,000 small business employers who use Intuit Online Payroll. The month-to-month changes are seasonally-adjusted and informative about the overall economy.
State Percent Change in Employment Arizona 0.5% California 0.4% Florida 0.5% Georgia -0.2% Illinois 0.3% Maryland 0.8% Massachusetts 0.3% New Jersey 0.8% New York -0.3% North Carolina -0.1% Texas 0.4% Virginia 0.2% Washington 0.6%
Small Business Employment by State is up for many states across the country with the highest increases month over month in Maryland and Washington. The states above reflect those for which Intuit Online Payroll has more than 1,000 small business firms represented. The month-to-month changes are seasonally-adjusted and informative about the overall economy.
About the Index
The Intuit Small Business Employment Index is based on aggregate and anonymous online employment data from more than 58,000 small business employers, each with fewer than 20 employees. These small businesses use Intuit Online Payroll from Intuit, the No. 1 payroll provider with more than 1 million customers. These smallest employers are important to the economy as they comprise 87 percent of the total U.S. private employer base and employ nearly 20 million people. More information is available at: www.intuitinc.com/payrollindex.
Intuit reports data for three categories: small business employment, compensation and hours worked. Intuit analyzes and publishes the data at the beginning of each month. The Index also includes employment data broken down by geography. As with the government data, there may be revisions to the Intuit Index numbers. These revisions are partly due to calculations using the latest month of new Intuit data. These calculations include re-computing seasonal factors and the moving average process used to obtain the curve, which can change the values for previously reported months. Changes to the data are also due to revisions to the government employment data, which is used to calculate the Intuit Index.
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.
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About Intuit Inc.
Intuit Inc. is a leading provider of business and financial management solutions for small and mid-sized businesses; financial institutions, including banks and credit unions; consumers and accounting professionals. Its flagship products and services, including QuickBooks(R), Quicken(R) and TurboTax(R), simplify small business management and payroll processing, personal finance, and tax preparation and filing. ProSeries(R) and Lacerte(R) are Intuit's leading tax preparation offerings for professional accountants. Intuit Financial Services helps banks and credit unions grow by providing on-demand solutions and services that make it easier for consumers and businesses to manage their money.
Founded in 1983, Intuit had annual revenue of $3.5 billion in its fiscal year 2010. The company has approximately 7,700 employees with major offices in the United States, Canada, the United Kingdom, India and other locations. More information can be found at www.intuit.com.
Intuit and the Intuit logo, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries. Intuit Small Business Payroll Index is copyrighted by Intuit. Its contents may not be resold or modified in any way. It can be linked to and referenced with the following attribution: "Intuit Small Business Employment Index (C) Intuit Inc. All rights reserved." These Terms of Use supplement the Small Business Website Terms of Service at: http://smallbusiness.intuit.com/small-business/legal/index.jsp?_requestid=178246.
Source: Intuit Inc.
Released January 31, 2011