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Intuit Index Shows Small Businesses Creating Jobs, but Trend Slowing
States Hardest Hit by Recession See Employment Gains in February
MOUNTAIN VIEW, Calif. – Mar. 05, 2012 – 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.
“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 adjusted.
“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.
The Intuit Small Business Employment Index shows a 0.2 percent increase in employment for February 2012. The Employment Index reflects data from approximately 73,000 small business employers, a subset of small businesses that 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.
Slight Decreases 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 Employee Monthly Hours Worked for hourly employees decreased slightly by 0.04 percent in February 2012. The levels reflect data from approximately 191,000 hourly employees of the Intuit Online Payroll customer set of approximately 73,000 businesses and are not necessarily representative of all small businesses. However, the month-to-month changes reflect the results of federal employment data for small businesses during corresponding times, leading to the conclusion that they are informative about the overall economy.
Small Business Employee Monthly Compensation for all employeesshows compensation increased slightly by 0.15 percent in February 2012. This data includes the compensation paid by small business owners to themselves. The levels reflect data from approximately 310,000 employees of the Intuit Online Payroll customer set of approximately 73,000 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 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.”
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.
|State||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 insurance.
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.