SMBs

Paychex CEO: SMB Employment Is Dropping

Martin Mucci, CEO of Paychex, the payroll processing and human resources company, said the amount of small- to medium-sized business (SMB) employment has fallen again, CNBC reported.

The news comes after the amount of employment at SMBs seemed to be trending upward over the past few months. But now it's back to the kind of low that was seen early in the pandemic.

Mucci told CNBC's “Squawk Box” that the job index dropped in July, making it flat since April.

Paychex has sourced its monthly Small Business Employment Watch from the payroll data of 350,000 SMB clients, alongside nationwide employment and wage trends, in order to get a view by region and sector, CNBC reported. The report is done in conjunction with IHS Markit and is released before the government's monthly jobs report.

This month, there was a decline of 0.24 percent from last month and a 3.65 percent drop from last year. There was also a 3.65 percent drop between March and April, according to CNBC, with states in the southern and western parts of the country suffering the biggest falls while the coronavirus surged there in July.

But Mucci said there were some positives anyway, such as the rebound in the financial activities sector and in construction. New home sales were also up, and there was more new consumer demand based on how many hours people worked.

Mucci told CNBC the data showed that there was a need for more Paycheck Protection Program (PPP) loans.

“The stimulus certainly helped in June and July,” Mucci said, according to CNBC. “Right now, the biggest issue for small businesses is uncertainty. There’s a lot of uncertainty about PPP loans, the flexibility of how they use those loans funds, when they pay it back.”

As the pandemic has continued to surge, unemployment has started to rise again after a period of time in which it seemed to be falling, PYMNTS reported. There were over 1 million new applications for unemployment assistance both of the last two weeks.

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