Workers at U.S. small businesses saw the 12^th consecutive month of increasing hourly earnings gains, while the pace of job growth slowed in May. These insights are according to the latest Paychex | IHS Markit Small Business Employment Watch. The May report shows average hourly earnings stand at $30.31, up by 5.19 percent from a year ago. The Small Business Jobs Index, which measures the year-over-year rate of employment growth, decreased 0.27 percent from the previous month to an index level of 100.87.

"As the unemployment rate nears record lows, small business hiring has also slowed," said James Diffley, chief regional economist at IHS Markit.

"After holding near an eight year high in April, small business job growth was down in May. Despite the one-month change, job growth at U.S. small businesses remains strong even in the face of the tight labor market and inflation pressures," said Martin Mucci, Paychex CEO.   

In further detail, the May report showed:

• Nationally, hourly earnings have increased $1.50 during the past year, now reaching $30.31.

• At 100.87, the national jobs index saw the largest one-month decline in more than two years.

• The south continued as the top region for small business job growth, Texas was once again the leading state, and Dallas continued as the top metro.

• The south was the top region for hourly earnings growth, including North Carolina as the leading state.

• Leisure and hospitality leads the industry sectors in both small business job growth and hourly earnings growth.

Paychex solutions reach 1 in 12 American private-sector employees, making the Small Business Employment Watch an industry benchmark. Drawing from the payroll data of approximately 350,000 Paychex clients with fewer than 50 employees, the monthly report offers analysis of national employment and wage trends, as well as examines regional, state, metro, and industry sector activity.