Paychex CEO tells Jim Cramer that small business hiring picked up in September despite slowdown worries
- The Paychex IHS Markit Small Business Employment Watch showed the first increase in small business hiring since February.
- "One month doesn't make a trend, but we certainly saw job growth pick up a bit. [The index is] down 1% from last year ... because it's a tight market and it's tight for small businesses to hire ..." Paychex CEO Marty Mucci tells CNBC.
- "Our feeling is while businesses are a little bit concerned overall about the economy, the demand for their products is still there and they're out trying to hire," he says in a "Mad Money" interview.
Small business job growth rebounded last month "for the first time in a few years," despite increasing concerns that the U.S. economy is slowing down, Paychex CEO Marty Mucci told CNBC on Wednesday.
In the September reading of the Small Business Employment Watch from Paychex and IHS Markit, the jobs index posted a 0.21% gain, which snapped six straight months of decline. That's the fastest one-month move since 2016, according to Paychex, the country's second-largest payroll processor behind ADP.
"One month doesn't make a trend, but we certainly saw job growth pick up a bit. [The index is] down 1% from last year, the job growth level for small businesses, but that's because it's a tight market and it's tight for small businesses to hire and retain folks," he said in a one-on-one with Jim Cramer on "Mad Money." "But right now, you know, we're feeling pretty good on the business sentiment."
Paychex and IHS Markit's joint indicator is used to gauge small business wage and employment trends. Small business is defined as firms with staff of 50 people or less, Mucci said.
The comments come days before the U.S. government releases its nonfarm jobs report for the month of September. On Wednesday, ADP and Moody's Analytics said in their own monthly report that the private sector added 135,000 more workers, topping the 125,000 number that economists predicted, but that it was the slowest pace since June as the labor market tightens.
Based on the Paychex and IHS Markit jobs index, the wage rate also advanced 2.8%, Mucci said. Hours worked also made gains, he added.
"Our feeling is while businesses are a little bit concerned overall about the economy, the demand for their products is still there and they're out trying to hire," Mucci said. "The biggest challenge is hiring people to fill the demand that they have. That's good news."
Cramer interviewed Mucci after Paychex reported its first-quarter report for the 2020 fiscal year. Revenues grew nearly 15% to $992 million, better than the $991 million that analysts expected, according to Factset. Shareholders earned 71 cents per share, topping the 69 cents that Wall Street predicted.
Paychex estimates full-year fiscal 2020 revenue to come in at between $4.15 billion and $4.18 billion. The high-end target would represent nearly 11% growth from the year prior.
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