Small Business

Small-business job growth resumed in June: IHS-Paychex

Small business hiring

Employment growth among U.S. small businesses resumed last month after breaking a three-month streak of gains in May.

The Paychex IHS Small Business Jobs Index advanced 0.21 percent to 100.81 in June from the previous month, marking the best reading yet this year. A measurement above 100 indicates growth.

The index increased 0.44 percent in the first six months of the year, despite a one-month dip in the second quarter. Small-business job growth slipped 0.18 percent in May.

The index is now up 0.18 percent year over year after trending flat to negative for the last 18 months.

"The good thing is it's the highest it's been in a year, so I think the growth we're feeling is pretty good," Martin Mucci, president and CEO of Paychex, told CNBC's "Squawk Box" on Tuesday.

The report comes just days before the Labor Department releases its closely watched U.S. jobs data on Friday. Last month, the data showed the country added just 38,000 positions in May, versus expectations for 162,000 new jobs.

"We kind of foreshadowed the jobs report drop, so I'm hoping that with this bounce back in June, we'll see the jobs report up at the end of this week," Mucci said.

The South Atlantic region, which stretches from Delaware to Florida, led all other U.S. Census Bureau divisions with a record reading of 101.96.

Among states, Washington extended its reign as the top performer to a sixth month. Seattle topped the list of metro areas once again in June, falling just short of last month's record 105 index reading.

At the sector level, services excluding public administration led the rankings. Construction saw its strongest gains in three years.

"Construction came on strong particularly on the East Coast and in the South," Mucci said. "We're seeing lots of growth in the South — construction, other services, leisure and hospitality."

The Paychex IHS index measures same-store, year-over-year changes in worker count to determine trends in employment. Paychex is an outsourcing solutions firm, and IHS provides information and analysis.