Sluggish wage and job growth hit U.S. small businesses (SMBs) in June, leading to a decline in an index measuring economic health in those areas.
According to the Paychex | IHS Markit Small Business Employment Watch, the Small Business Index in June declined to 99.40, a 0.69 percent year-over-year decrease. That June score also marks the 12th consecutive month of a Small Business Index mark of less than 100.
The reasons for that dim performance in June?
“The pace of annual wage growth moderated, falling to 2.47 percent ($0.64) in June,” according to a statement. “It is the first time since early 2016 that wage growth has been below 2.50 percent. Weekly earnings growth also slowed slightly to 2.73 percent, while weekly hours worked increased 0.20 percent year over year.”
Low unemployment may stand as a blessing for many workers and others, but not for small businesses.
“Despite the tightening labor market conditions, we’re seeing only modest levels of wage growth,” said Martin Mucci, Paychex president and CEO. “With the unemployment rate at historic lows, we’d expect to see accelerating wages in this type of employment market.”
In related news, a recent report said that the amount of lending to small businesses by the five leading online lending providers increased 50 percent between 2015 and 2017. The report, entitled “The Economic Benefits of Online Lending to Small Businesses and the U.S. Economy,” found that the “nation’s largest FinTech small business lending platforms funded nearly $10 billion in online loans from 2015 to 2017, generating $37.7 billion in gross output, creating 358,911 jobs and $12.6 billion in wages in U.S. communities.”