NEW YORK (AP) – Payroll payments per small business subsided as 2023 drew to a close, new data from Bank of America shows.
Payroll payments for small businesses rose 1.7% in December, according to a report from BofA. This is in line with the overall trend over the past year, with payrolls increasing in most months. However, the report said the pace of employment growth has slowed “significantly” since its peak in March 2022. Data is culled from Bank of America business customers whose annual revenue is less than $5 million.
Deceleration is not necessarily negative. BofA analysts say this slow trend could indicate more sustainable job growth going forward.
“This is primarily driven by a slowdown in wage growth, particularly in high-contact sectors such as leisure and health care, which have been more affected by persistent labor issues during this period,” economist Taylor Bowley said in the report. I think that reflects that.”
Small businesses have been under pressure for the past two years due to high inflation, high costs and labor shortages. However, labor shortages are easing and wage inflation is starting to decline.
Trends vary by industry. The report found that employment growth in the lodging, restaurant, and retail industries has slowed slightly, but continued strong employment growth in these sectors offsets this to some extent.
Meanwhile, the healthcare industry continues to see strong growth in labor costs, reflecting post-pandemic headcount increases and the growing demand for medical services from the aging baby boomer generation (born between 1946 and 1964). .
