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Small Businesses Added 25,000 New Jobs in May
Intuit Small Business Employment Index Shows Increase in Wages, Slight Decrease in Hours Worked
MOUNTAIN VIEW, Calif. – May. 27, 2010 – Small business employment grew by 0.1 percent in May, equating to a 1.6 percent annual growth rate, according to the latest Intuit Inc. (Nasdaq: INTU; @intuit) Small Business Employment Index (#SMBindex).
This translates to approximately 25,000 new jobs in May and a revised estimate of 240,000 total new jobs since October 2009. Intuit released the monthly report, based on figures from the country's smallest businesses that use Intuit Online Payroll.
The Intuit Small Business Employment Index shows increasing employment since October of 2009, reversing a downward trend that dates back to 2007. The employment index reflects data from approximately 50,000 small business employers who use Intuit Online Payroll. The month-to-month changes are seasonally-adjusted and informative about the overall economy. The National Employment Index is from the Bureau of Labor Statistics.
"While the May growth in employment is not as strong as last month, it's still going up," said Dr. Susan Woodward, the nationally-recognized economist who worked with Intuit to create the index. "Despite the slower growth rate and slight decline in hours worked, the recovery is still unambiguous in the Intuit data: Employment and compensation per worker continue to show that a recovery is underway. The new hire rate continues to rise slightly, as does the hourly rate of pay. "
"We continue to see modest growth for small business employment," added Cameron Schmidt, vice president of Intuit's Employee Management Solutions division. "While signs of a recovery have slowed slightly this month, the data overall still continues to show an upward trend."
Compensation Increases and Hours Worked Declines
The data also shows an increase in compensation per worker, which continues to show signs that a recovery is underway. Compensation grew by 0.3 percent in May and is now $2,566 per month, compared to a revised estimate of $2,559 per month in April.
Monthly hours worked declined by 0.1 percent in May to 101.6 hours compared to a revised estimate of 101.7 hours in April. This translates to wages of about $30,800 per year for all employees and a 23.5-hour week for hourly employees.
"Hours worked for hourly employees dropped slightly this month after rising a little last month, but the drop was enough to pull the trend down," Woodward said. "The good news though is that hours per worker are falling at a slower rate."
Small Business Employee Monthly Compensation for all employees shows compensation rising in May 2010, after being primarily flat since the fall of 2008. This data includes the compensation paid by small business owners to themselves. The levels reflect data from approximately 200,000 employees of the Intuit Online Payroll customer set of 50,000 businesses, and are not necessarily representative of all small business employees. The month-to-month changes are seasonally-adjusted and informative about the overall economy.
Small Business Employee Monthly Hours Worked for hourly employees are down in May 2010. The levels reflect data from approximately 120,000 hourly employees of the Intuit Online Payroll customer set of approximately 50,000 businesses, and are not necessarily representative of all small businesses. However, the month-to-month changes reflect what is shown in Federal employment data for small businesses when there are corresponding time ranges leading us to believe that they are 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 50,000 small business employers each with fewer than 20 employees. These small businesses use Intuit Online Payroll from Intuit, the No. 1 provider of payroll software 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. More information is available at: www.intuitinc.com/payrollindex.
Intuit reports data for three categories: small business employment, compensation and hours worked. Intuit will analyze and publish the data at the beginning of each month. 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 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 provides enhanced online banking solutions and unique insights to help banks and credit unions serve businesses and consumers with innovative solutions.
Founded in 1983, Intuit had annual revenue of $3.1 billion in its fiscal year 2009. The company has approximately 7,800 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.