Job growth increased in September, as did hourly and weekly earnings growth, according to the latest Paychex | IHS Markit Small Business Employment Watch. At 98.22, the national jobs index experienced its largest gain in three years (0.21 percent), breaking with recent trends; however, the index remains down 0.97 percent year-over-year. In September, hourly earnings growth rose at its fastest one-month pace since 2016 to 2.77 percent ($0.74). Weekly earnings growth continued its upward trend as well, reaching 2.93 percent.

"The national index turned up for the first time since February. While still almost a full percentage point below a year ago, it remains to be seen whether this one-month change marks a turning point," said James Diffley, chief regional economist at IHS Markit.

"Employment and earnings increases in the Construction industry contributed to the encouraging national gains for both jobs and wages in September," said Martin Mucci, Paychex president and CEO. "Increased optimism from business owners in their ability to fill open positions with qualified candidates and raise wages was also reflected in our Fall 2019 Business Sentiment Report, released last week."

Broken down further, the September report showed:

The South remains first among regions in employment growth; hourly earnings growth in the Northeast hit a decade high.

Tennessee continues to lead states in small business job growth; Illinois remains the top state for wage growth.

Dallas is again the top metro for job growth; San Diego maintains its lead among metros in wage growth.

Recent increases in weekly hours worked growth has sparked weekly earnings; the three-month weekly earnings annualized growth rates are higher than the 12-month rates in every industry.

The complete results for September, including interactive charts detailing all data at a national, regional, state, metro, and industry level, are available at www.paychex.com/employment-watch. Highlights are available below.

National Jobs Index

The 0.21 percent gain in September is the largest one-month increase in three years, though it only represents a portion of the job growth pace lost since May (0.55 percent).

The Paychex | IHS Markit Small Business Jobs Index is down 0.10 percent during the past quarter and 0.97 percent during the past year.

 National Wage Report

At 2.77 percent, hourly earnings growth had its biggest one-month increase in more than three years.

Weekly earnings growth continued its upward trend in September to 2.93 percent, the highest rate since the beginning of 2018.

 Regional Jobs Index

Every region improved in September, with the exception of the West, which is down 0.04 percent from August.

The South remains the top region for small business employment growth in September.

 Regional Wage Report 

All four regions saw weekly earnings growth acceleration.

Hourly earnings growth in the Northeast hit a decade high in September, 2.94 percent.

Hourly earnings growth in the Midwest has leveled off at 2.55 percent for each of the past three months.

 State Jobs Index

Tennessee and Texas continue to lead small business employment growth, with indexes above 100.

Missouri, Georgia, and Illinois each had large increases in September, but remain below 99.

New York gained 0.47 percent in September; however, its index is below 98 for the seventh consecutive month.

Note: Analysis is provided for the 20 largest states based on U.S. population.

State Wage Report

Slowing slightly from August, Illinois continues to rank first among states for hourly earnings growth at 4.03 percent.

Weekly earnings growth increased significantly to 3.90 percent in New York, best among states, with the one-month annualized growth rate topping five percent for the past two months.

 Note: Analysis is provided for the 20 largest states based on U.S. population.

Metropolitan Jobs Index 

Dallas and Phoenix remain the top-ranked metro indexes, despite having the largest decreases in September.

Ranked 19th among metros in March, with an index below 97, Philadelphia surged to third place, following six successive monthly increases, bringing its index to 99.45.

Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Metropolitan Wage Report

With weekly hours worked growth turning positive and another minimum wage increase released in July, weekly earnings growth increased in San Francisco to 3.88 percent, best among metros.

San Diego and Chicago lead metro hourly earnings growth, with rates of 4.02 percent and 4.00 percent, respectively.

Note: Analysis is provided for the 20 largest metro areas based on U.S. population.

Industry Jobs Index

Manufacturing had the strongest gain among industry sectors, up 0.51 percent, but continues to have the lowest index, 96.39.

Though essentially unchanged during the past quarter, at 99.12, Construction gained 0.22 percent in September.

All industries are reporting a slowdown in job growth compared to last year.

Note: Analysis is provided for seven major industry sectors. Definitions of each industry sector can be found here. The Other Services (excluding Public Administration) industry category includes religious, civic, and social organizations, as well as personal services, including automotive and household repair, salons, drycleaners, and other businesses.

Industry Wage Report  

Hourly earnings gains in Manufacturing are approaching the four percent mark, while Construction is steadily improving as well (3.48 percent).

At $17.56/hour, the hourly earnings rate in Leisure and Hospitality has improved $0.82/hour (4.88 percent) over last year.

The recent turnaround in weekly hours worked growth has sparked weekly earnings; the three-month weekly earnings annualized growth rates are higher than the 12-month rates in every industry.