Small business payroll growth is moderating, but that could mean more sustainable growth ahead
Payroll payments per small business moderated as 2023 came to a close, according to new data from Bank of America
NEW YORK (AP) — Payroll payments per small business moderated as 2023 came to a close, according to new data from Bank of America.
The BofA report found that payroll payments rose 1.7% in December at small businesses. That's consistent with the general trend last year, with payroll payments rising most months. But the pace of payroll growth has slowed “significantly” from its peak in March 2022, the report said. Data is culled from Bank of America's business clients with less than $5 million in annual revenue.
The slowdown is not necessarily a negative. The moderation could indicate more sustainable payroll growth going forward, BofA analysts wrote.
“We think this primarily reflects slowing wage growth, especially in high-touch sectors like leisure and healthcare that were more strongly impacted by persistent labor problems during that period,” economist Taylor Bowley wrote in the report.
