The Fed resumed interest rate hikes amid strong economic indicators such as low unemployment and housing market stability. But what about Main Street?
Homebase data reveals that small businesses continue to battle labor shortages by increasing wages— even as summer slow downs and heat waves slow business.
The Fed has resumed its wage hikes amid seasonal dips in employment activity on Main Street. Meanwhile, small businesses owners are tackling the labor shortage with wage increases for workers, while extreme heat hampers consumer spending in the South and Southwest. Homebase seeks to understand how the broader economic environment is affecting small businesses and their employees during the beginning of Q3 by analyzing behavioral data from more than two million employees working at more than one hundred thousand SMBs.
Summary of findings: Main Street businesses seeing an expected seasonal dip in activity for summer. Team growth slows as wages increase.
- Small businesses saw an expected seasonal dip in people working.
- Entertainment and Hospitality grew their teams but less than in previous years, while Retail and Food & Drink declined more than in previous years.
- It’s too hot to work in the South and Southwest amid the heat waves.
- Hourly wages increased again—and even more aggressively than in June—led by summer demand in entertainment.
Summertime means less activity for Main Street businesses.
Small businesses saw an expected dip in July in people working and hours worked. This is a consistent seasonal trend every year.
Employees working
(Monthly change in 7-day average, relative to January of reported year)
Hours worked
(Monthly change in 7-day average, relative to January of reported year)
Data compares rolling 7-day averages for weeks encompassing the 12th of each month; April data encompasses the subsequent week to account for Easter holiday. Source: Homebase data.
But this year, it really is too hot to work.
Extreme heat in the South disrupted consumer habits, reduced foot traffic, and translated into people working less.
Note: July 6-12 vs. June 11-17. Source: Homebase data
Slower than expected team growth this year as many small businesses still face labor shortages and rising wages.
Entertainment¹ and Hospitality increased their teams sizes from June to July, but the growth was far less than in prior years for the same period.
Food & Drink and Retail saw modest declines in employees working from June to July, but these declines were larger than in prior years.
Percent change in employees working
(Mid-July vs. mid-June, using Jan. ‘19, Jan. ‘22, and Jan. ‘23 baselines) ²
- Entertainment includes events/festivals, sports/recreation, parks, movie theaters, and other categories.
- July 7-13 vs. June 9-15 (2019); July 10-16 vs. June 12-18 (2022); July 6-12 vs. June 11-17 (2023). Source: Homebase data
Wage growth re-accelerated, driven by demand in Entertainment.
Note: Data measures average hourly wages for locations that utilized Homebase to pay employees in both July 2022 and July 2023. Total includes industries not depicted here. Source: Homebase Payroll data.
Link to PDF of: July 2023 Homebase Main Street Health Report If you choose to use this data for research or reporting purposes, please cite Homebase.
The post Too Hot to Work: Jobs Dip as Temperatures Climb appeared first on Homebase.
