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The Paychex | IHS Small Business Jobs Index decreased 0.17 percent in May, bringing the national index to 100.65. Year over year the national index declined 0.49 percent. Moderating from last month, the drop in the national index brought the three-month growth rate to -0.18 percent. The East North Central region surpassed the West North Central to become the top-ranked regional index. Indiana regained the lead among states tracked by the index with the best one-month and 12-month growth rates. Among the metro areas measured by the index, Dallas continued to lead, while Washington, D.C. showed the most improvement.
“The Paychex | IHS Small Business Index dropped 0.17 percent in May, reverting to its January 2015 level. While the national index is well below the level set throughout most of 2014, small businesses are expanding to be sure, but at a rate consistent with the growth seen in 2012,” said James Diffley, chief regional economist at IHS.
“May’s index results seem to be in line with the story of the overall economic recovery: moderate, but somewhat inconsistent growth. While it’s not ideal to see the growth rate slowing, we’ll need to see how this trend plays out over the long term,” said Martin Mucci, president and CEO of Paychex.
After holding onto the positive momentum of early 2015 in April, job gains slowed in May. At 100.65, the national index is at its lowest level of 2015 and 0.49 percent behind the job growth rate of May 2014.
The East North Central overtook the West North Central for the top-ranked regional index position as the WNC had the lowest one-month growth rate for the second consecutive month. Up for the fourth straight month and the only region to improve in May, the Mountain index climbed to 100.80, growing 0.77 percent from February to May.
State Employment Trend
At 103.65, Indiana regained its position as the top-ranked state with the best one-month and 12-month growth rates. Indiana’s gains follow strong total employment growth in April, as reported by the BLS. Neighbor Illinois also advanced strongly, up 0.34 percent in May. The pace of small business employment growth slowed in Texas for the third consecutive month as the state’s index fell to its lowest level since January 2012.
Metropolitan Employment Trend
With the best 12-month growth rate and an index level over 104, Dallas remained the top-ranked metro index. Up 0.64 percent, Washington improved the most from April to May as its index level is at a four-year high. Regaining momentum from a recent four-year low in March 2015, New York City had its first consecutive month increase since February 2014. Ranked last among metro areas, Boston has yet to bottom out, falling again in May to 98.61.
Note: Analysis is provided for the 20 largest metro areas based on U.S. population.