Job creation among small businesses continued in February, albeit
slowly. This slow growth was accompanied by a small uptick in
compensation and slight decrease in hours worked.
These are among the results for the Intuit
Inc. (Nasdaq: INTU) Small
Business Employment Index for February, covering the period between
Jan. 24 and Feb. 23. February’s report estimates that small business
employment grew by 0.2 percent, equating to an annual growth rate of 2.9
percent, and approximately 45,000 new jobs. Intuit plans to recalibrate
its Employment Index in the coming months and expects these numbers to
be lower. This is a common statistical practice and the recalibration
will be based on new data provided by the Bureau of Labor Statistics,
which are used as inputs into the Index.
While employment grew slowly in February, average monthly hours worked
decreased slightly by 0.04 percent, or six minutes, and average monthly
compensation increased by 0.15 percent, or $4 per worker.
The Index is based on figures from small businesses with fewer than 20
employees that use Intuit Online
Payroll. More information on the index is available at index.intuit.com.
“We saw another month of tepid improvement for small businesses in
February, echoing pretty much all of the other indicators of economic
activity,” said Susan
Woodward, the economist who worked with Intuit to create the Index.
“As an overall trend, employment is up modestly, but the number of hours
worked by hourly employees is about the same as last month, seasonally
“Compensation is up very slightly in dollar terms, but adjusted for
inflation, it is essentially flat. The hiring rate is slightly down on a
seasonally adjusted basis, and sits at about half of what it was before
the recession was underway. The low hiring rate reflects the reluctance
of employees to leave their jobs in such an unsecure job market, so
employers do not need to hire to replace them. This phenomenon is
present in firms of all sizes, and is not unique to small firms.”
Based on January’s numbers and revised national employment data from the
Bureau of Labor Statistics, Intuit revised upward the previously
reported January growth rate to 0.3 percent. This equates to 55,000 jobs
added in January, up from a previously reported 50,000 jobs, though
these numbers are expected to be lower once the Index is recalibrated.
Slight Decrease in Hours Worked, Increase in Compensation
Small business hourly employees worked an average of 108.5 hours in
February, a slight decrease of 0.04 percent from 108.6 hours in January,
making for a 25-hour workweek. Average monthly pay for all small
business employees increased slightly to $2,686 in February, an increase
of 0.15 percent from the January revised estimate of $2,682 per month.
The equivalent annual wages would be about $32,200 per year, which is
part-time work for many small business employees.
Small Business Employment by Geography
The Intuit Index shows employment growth in all census divisions, except
for the East North Central region.
“Interestingly, the biggest gains were seen in the states that have
suffered most from the recession – the majority of the western states,
plus Florida,” said Woodward. “The area around New York continues to
look softer than the rest of the country.”
U.S. Census Division
Percent Change in Employment
East North Central
West North Central
East South Central
West South Central
Small Business Employment by U.S. Census Division continues to
grow in most parts of the country. The data reflects employment from
approximately 73,000 small business employers who use Intuit Online
Payroll. The month-to-month changes are seasonally-adjusted and
informative about the overall economy.
Percent Change in Employment
Small Business Employment by State is up for most states in 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 approximately 73,000 small business employers, each with fewer than
20 employees. These small business employers use Intuit
Online Payroll and represent a subset of the total Intuit Online
Payroll user base. 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: index.intuit.com.
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 also arise from
revisions to the government employment data that are used as inputs to
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.
Intuit Small Business Employment Index: index.intuit.com
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Intuit Payroll on Twitter: www.twitter.com/IntuitPayroll
Intuit Small Business Blog: www.blog.intuit.com
About Intuit Payroll
Intuit is the No. 1 payroll provider
with more than 1 million customers. The company provides a range of
fast, easy and accurate payroll solutions to meet a variety of small
business needs. These include do-it-yourself payroll solutions such as
Intuit Online Payroll as well as do-it-for-me solutions such as Intuit
Full Service Payroll. Intuit also offers easy-to-understand and
affordable small business employee benefits and insurance including
employee healthcare, 401(k) retirement plans and worker’s compensation
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®,
Quicken® and TurboTax®,
simplify small business management and payroll
processing, personal finance, and tax preparation and filing. ProSeries®
and Lacerte® 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 $3.9 billion in its fiscal
year 2011. The company has approximately 8,000 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 © Intuit Inc. All rights reserved.” These