August hourly pay increases at small businesses dipped below 3% for the first time since June 2021, according to Sept. 3 Paychex data.
The small business labor market — made up of employers with fewer than 50 employees — can be a leading indicator for the nationwide market, the organization said.
Wage Growth Trends
Hourly pay increases at small businesses dipped below 3% for the first time since June 2021.
August’s data suggests a cooling labor market and supports the Fed’s widely reported intention to begin lowering interest rates, according to Paychex.
Hourly earning growth at small businesses held steady for months before decelerating in August, the payroll company said. The dip below 3% for the first time in three years is a “notable signal that the labor market is moving closer to its pre-pandemic level,” John Gibson, Paychex president and CEO, said in a statement.