Mountain View, California (PRESS RELEASE – August 30, 2011) – Small businesses created 35,000 new jobs in August, but employees worked fewer hours and received less money.
These are among the results of this month’s update of the Intuit Inc. (Nasdaq:INTU) Small Business Employment Index, covering the period between July 24 and Aug. 23. The monthly report found that small business employment grew by 0.18 percent in August, equating to an annual growth rate of 2.2 percent. Hours worked and compensation decreased by 0.3 percent and 0.08 percent respectively.
Since the hiring trend began in October 2009, small businesses have created 540,000 new jobs. The Index is based on figures from small businesses with fewer than 20 employees that use Intuit Online Payroll.
Based on these latest numbers and revised national employment data from the Bureau of Labor Statistics, Intuit revised slightly downward the previously reported growth rate for July to 0.21 percent from 0.24 percent. This equates to 40,000 jobs added in July.
“There was plenty of bad news this month and the Intuit small business employment figures show this,” said Susan Woodward, the economist who worked with Intuit to create the Index. “While employment rose overall, and increased in most of the regions and states that we report on, there are other signs that the small business labor market is weak.”
“Compensation and hours worked fell—which is the opposite of what we saw in July. From this month’s numbers, we don’t see a new recession, but we don’t see a robust recovery either. The labor market for smaller businesses is still soft,” Woodward added.
Decrease in Hours Worked, Compensation
Small business hourly employees worked an average of 108 hours in August, making for a 24.9-hour workweek. This is a 0.3 percent decrease from the revised July figure of 108.3 hours.
Average monthly pay for all small business employees was $2,649 per month in August. This is a 0.08 percent decrease compared to the July revised estimate of $2,651 per month. The equivalent annual wages would be about $31,800 per year, which is part-time work for many small business employees.
“With a soft labor market, employers no longer have to pay more to get help,” said Woodward.
Small Business Employment by Geography
The Intuit Index also breaks down employment by census divisions and states across the country. The Pacific, South Atlantic and West North Central regions posted the largest employment gains at 0.3 percent.
“In contrast to compensation and hours worked, the breakdown by geography tells a more hopeful story,” said Ginny Lee, senior vice president and general manager of Intuit’s Employee Management Solutions division. “Employment is still up in most states and divisions across the country. For the few with declines, they are slight and statistically insignificant.”
Small Business Employment by U.S. Census Division continues to grow in most parts of the country except the Mountain and East South Central divisions. The data reflects employment from approximately 69,000 small business employers who use Intuit Online Payroll. The month-to-month changes are seasonally-adjusted and informative about the overall economy.
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 69,000 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.
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 recomputing 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.
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.