Small business employees saw their wages grow last month at the strongest rate in more than two years, according to a report from Paychex.
Hourly earnings in April increased at an annual rate of 3.25%, the best showing since 2016. Wages of $26.56 per hour last month were up 2.69%, or 70 cents, from a year ago.
"The low unemployment rate is contributing to steady increases in wage growth," Martin Mucci, Paychex president and CEO, said in the report released May 1. "With tightening labor conditions and wages continuing to show positive momentum, business owners and HR managers will need to focus on recruitment and benefit strategies to attract and retain qualified talent."
However, the overall Small Business Jobs Index of business conditions declined 0.12% from last month to 99.53.
Tennessee remains the top-ranked state for small business job growth, Paychex said. Arizona ranks first in annual hourly earnings growth. The manufacturing sector has seen the pace of small business growth improve nearly 1% from last year.
The numbers were pulled from Paychex client payroll data.
In a separate study, the CNBC/SurveyMonkey Small Business Survey found that confidence among America's small business owners remains near an all-time high, despite concerns about President Trump's trade policies.