Small business employees saw their wages grow last month at the strongest rate in more than two years, according to a report from human resources firm Paychex.
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Hourly earnings in April increased at an annual rate of 3.25 percent, the best showing since 2016. Wages of $26.56 per hour last month were up 2.69 percent, or 70 cents, from a year ago.
“The low unemployment rate is contributing to steady increases in wage growth,” Martin Mucci, Paychex president and CEO, said in the report released Tuesday. “With tightening labor conditions and wages continuing to show positive momentum, business owners and HR managers will need to focus on recruitment and benefit strategies to attract and retain qualified talent.”
However, the overall Small Business Jobs Index of business conditions declined 0.12 percent from last month to 99.53.
Tennessee remains the top-ranked state for small business job growth, Paychex said. Arizona ranks first in annual hourly earnings growth. The manufacturing sector has seen the pace of small business growth improve nearly 1 percent from last year.
Paychex — a provider of payroll, human resource, insurance and benefits outsourcing services for small-to-medium-sized businesses — draws its numbers from client payroll data.
In a separate study out Tuesday, the CNBC/SurveyMonkey Small Business Survey found that confidence among America’s small business owners remains near an all-time high, despite concerns about President Donald Trump‘s trade policies. The online poll, with responses from more than 2,000 small business owners each quarter, was conducted from April 11–17.
The surveys come three days before the Bureau of Labor Statistics releases its closely watched April employment data. Nonfarm jobs grew less than expected in March, but average hourly earnings rose more than forecast.