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In May, economic uncertainty persisted in the face of debt ceiling debate, and another interest rate hike by the Fed.
Although, this didn’t stop small businesses from their summer hiring ramp up, albeit at lower employee wage rates than seen last year.
Another month, another rate hike from the Federal Reserve – policymakers continued to pump the brakes in May, as they remain split on whether additional intervention might be necessary in coming months. Homebase seeks to help clarify how the broader economic environment is affecting small businesses and their employees as summer approaches by analyzing behavioral data from more than two million employees working at more than one hundred thousand SMBs.
Summary of findings: SMB employment activity increased, but wage rates decreased for the first time since 2021.
- Employment activity at small businesses increased in May; as spring turns to summer, small businesses are experiencing a seasonal boost.
- Retail and Food & Drink are showing strength, continuing to outpace their historical seasonal growth.
- Spring weather variation is likely driving regional differences - warm weather in the Midwest and storms in Texas translated into varied business activity.
- Wages declined from April to May (-0.2%) for the first time since 2021, as decreases show a cooling labor market.
Employment activity at small businesses increased in May As spring turns to summer, small businesses experience a seasonal boost
Employees working
Retail and Food & Drink are showing strength, continuing to outpace historical seasonal growth
While most industries have picked up through May, Retail, Food & Drink, and Caregiving (1.3%, 0.7%, and 0.8%, respectively) have exceeded their seasonal growth benchmarks most significantly.
Hospitality (3.6%) and Entertainment (4.8%) saw the strongest increases from April to May, though their growth fell short of previous years.
Percent change in employees working
(Mid-May vs. mid-April, using Jan. ‘19 and Jan. ‘23 baselines)1
Spring weather likely driving regional differences
Warm weather in the Midwest and storms in Texas translated into varied business activity
After yet another interest rate hike, wage rates declined month over month for the first time since 2021
Wage inflation
Month-over-month change in average hourly wages
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Scott Leitner
Scott Leitner, PHR, CPP, MBA is Senior Manager, Payroll Operations at Homebase, with four years at the company and 18 years of experience in payroll implementation. His core strengths lie in process optimization, technology enablement, and team leadership, with extensive experience designing and refining implementation frameworks that balance quality, speed, and scalability.
At Homebase, Scott built end-to-end implementation procedures from scratch, introducing automation tools such as Salesforce integrations, AI-driven data handling, and robotic process automation to streamline client onboarding. He built standard operating procedures from the ground up—helping small business clients transition their payroll and HR processes onto the platform efficiently. His automation tools reduced manual work, accelerated onboarding timelines, and enhanced customer satisfaction—raising client quality scores from 7/10 to 9/10 within a year.
Prior to Homebase, Scott guided hundreds of small and midsize employers through complex payroll and HR system migrations at ADP, combining the structure and process discipline of large corporations with the adaptability and entrepreneurial mindset required in startup and small business settings.
Remember: This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.
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