Small business jobs-growth index eases in July from 2016 high

An index of small business employment growth eased last month after hitting its highest level of the year in June.

The Paychex IHS Small Business Jobs Index pulled back 0.12 percent to a reading of 100.68 in July from the previous month, in line with the year-to-date average for 2016. A measurement above 100 indicates job growth.

The index eked out a gain of 0.04 percent from the year-ago period.

Martin Mucci, Paychex president and CEO, said the drop in July is not large enough to indicate any broader slowdown in the U.S. economy. He noted the job-growth rate in small businesses is up 0.3 percent year to date.

"It's cautious, but it's still positive," he told CNBC's "Squawk Box" on Tuesday. "We saw a nice pop up in June, and year to date we're still up."

The South Atlantic region, which stretches from Delaware to Florida, led all other U.S. Census Bureau divisions. The area has seen small business employment increase 0.8 percent over the last year.

Washington state's reading slipped 0.83 percent to 103.63, but it remained the top-ranked state. Seattle also continued to lead other metro areas in the index, despite its reading declining from June.

Small business jobs growth eased in eight of the nine industries the index tracks. Only the trade, transportation and utilities sector saw its reading advance.

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.

The report comes three days before the Labor Department releases its closely watched monthly U.S. jobs data on Friday.