This Friday we will get to see the Labor Department’s employment situation report. If one number can influence the markets in a major way, the payrolls data would be considered one of the top reports. Many reports come out that try to give a pre-barometer for how the report will look. One such report is the monthly Intuit Inc. (NASDAQ: INTU) Small Business Employment and Revenue Indexes. This is only one segment, but the theory is that the jobs creation is going to come from small businesses as the recovery continues.
Intuit measures accounting and back office activities for many of the nation’s small businesses because it is the number one choice for accounting software for tax purposes. That does give the report some keen insight ahead of the employment report from the Labor Department. Keep in mind that the employment index is based on data from Intuit Online Payroll and QuickBooks Online Payroll, which covers the period from February 24 through March 23. The traditional Labor Department report runs from March 1 to March 31.
In summary for March, small businesses in the United States showed that employment increased slightly and that employees earned more money and worked more hours. Unfortunately, small business revenues continued to drop in February. The construction industry and the real estate services were the only increases. Here is a figure as to why this matters: about 20 million people are now employed in businesses with one to 19 employees.
Employment increased by 0.06% in March, adding 10,000 new jobs. That comes to an annualized growth rate of 0.7%. Average monthly compensation rose by 0.4% in March on a seasonally adjusted basis, or $12, the same increase reported in February. The average monthly hours worked rose by 0.2%, or 18 minutes, compared to the increase of 12 minutes reported in February.
Intuit’s full summary is here. We have also shown the other barometers to watch out for this week ahead of and including the Labor Department report on Friday. Estimates are from Bloomberg.
The ADP employment report figure from Automatic Data Processing Inc. (NASDAQ: ADP) on Wednesday morning is expected to be 205,000, versus 198,000 in February.
The Challenger job-cut report is due on Thursday.
Weekly jobless claims is due Thursday, the figure is expected to be 350,000, versus 357,000 last week.
The full employment situation report on Friday morning is expected to come to 193,000 for nonfarm payrolls, but it is expected to be 200,000 on private payrolls (versus 236,000 and 246,000 respectively, in February). The official unemployment rate is expected to remain static at 7.7%.
Here is the infographic on the employment data from Intuit: