Intuit QuickBooks Small Business Index August 2023

Intuit QuickBooks Small Business Index, August 2023

+51,600 jobs | 0.40%


In the US in July, small businesses with one to nine employees created 51,600 jobs — an increase of 0.40% since June. Nationally, these businesses now employ 13,064,300 people, up from 13,012,700 in the previous month*. Note that 13,012,700 is higher than the figure reported last month because the U.S. Bureau of Labor Statistics recently released new employment figures, and the Intuit QuickBooks Small Business Index always incorporates the latest official data as soon as it is available.

This is the second consecutive month small business employment has increased in the US. It is the largest monthly increase since the Intuit QuickBooks Small Business Index was launched in March 2023.

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Small businesses have played a significant role in driving employment growth.
Professor Ufuk Akcigit

Small business employment grew in eight sectors in July

In July, small business employment grew in 8 of the 12 sectors that are covered by the Index. The top three sectors creating the most jobs are:  


  • Education and health services (NAICS 61 & 62): creating 12,000 jobs, with a monthly growth rate of 0.51%. Education includes business training, sports coaching, and language schools, as well as colleges and universities. Health services cover both physical and mental health care.


  • Professional and business services (NAICS 54, 55-56): creating 6,400 jobs, with a monthly growth rate of 0.29%. This sector includes the legal and accounting professions, technical services such as engineering, architecture and design, and business services such as recruitment and administrative support.


  • Construction (NAICS 23): creating 4,200 jobs, with a monthly growth rate of 0.56%. This sector includes both residential and commercial construction. For context, roughly one in seven small business jobs in the US are in construction, making it the third largest sector for small business employment — behind the educational and health services sector and the professional and business services sector.


The fastest growing sector in July was agriculture, natural resources, and mining (NAICS 11 & 21), with a monthly growth rate of 0.98% — creating 1,800 jobs. Agriculture includes farming, forestry, fishing, and hunting. Natural resources and mining cover oil and gas extraction, raw materials, and associated support services.


Manufacturing sector has fastest falling small business employment

Overall, small business employment fell in four sectors in July. The leisure and hospitality sector, the utilities, transport, and warehousing sector, and the information sector all dropped again this month (as they did in June) but the manufacturing sector now leads the sectors with fastest falling small business employment (outpacing the information sector last month). 


  • Manufacturing (NAICS 31-33): down by 0.22% with 2,700 fewer jobs across the US compared to June. The manufacturing sector includes all businesses that create products from raw materials, whether by hand, machinery, or chemical processes.


  • Leisure and hospitality (NAICS 71 & 72): down by 0.13% with 1,900 fewer jobs. Leisure includes museums and attractions, theaters, casinos, golf courses, gyms, and spectator sports. Hospitality includes hotels, bars, coffee shops, and restaurants. 


  • Utilities, transport, and warehousing (NAICS 22 & 48-49): down by 0.08% with 600 fewer jobs. Utilities include power generation and distribution as well as sewage, irrigation, and air conditioning. Transport and warehousing covers all aspects of private and commercial transport for people and goods — including trucking, taxis, air, rail, and storage.

Small business employment grows in all eight US regions

The Great Lakes region created the most jobs in July — 14,800 in total — with a monthly growth rate of 0.78%. This is the second consecutive month that this region — which covers Illinois, Indiana, Michigan, Ohio, and Wisconsin — has created the most small business jobs in the US. 


The Southeast region also had notable growth in July — adding 10,600 small business jobs — with a growth rate of 0.37%. This region includes Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia.


Focusing on where small business employment is growing fastest, the Plains region (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota) comes out on top, with a monthly growth rate of 0.93% and 8,300 new jobs created. This is up from 0.62% in June. 


Ufuk Akcigit, the Arnold C. Harberger Professor of Economics at the University of Chicago, said: “Last month, the US witnessed a notable decline in inflation, as reported by the Bureau of Labor Statistics. The inflation rate dropped to 3%, marking a significant decrease from the 4% recorded in May and a substantial decrease compared to the 9.1% reported in June 2022. This decline in inflation is a positive signal for the economy, as it indicates a stabilization in price levels. This development may signal an alleviation of financial pressures for both consumers and businesses, fostering a more favorable economic environment. Chairman Jerome Powell indicated that the Federal Reserve no longer forecasts a recession. This optimistic outlook reflects a more positive stance from the central bank on the economy's growth prospects.


“In addition to the good news on inflation, the performance of small businesses has been positive, according to the Intuit QuickBooks Small Business Index. The Bureau of Labor Statistics has reported overall growth in U.S. employment and, notably, small businesses have played a significant role in driving this, with a remarkable 0.40% increase in jobs. It’s also encouraging to see a second consecutive month of job growth, up from 0.18% last month, showcasing the resilience of small businesses in the current economic landscape.


“According to the Bureau of Labor Statistics’ latest Consumer Price Index data, energy prices showed a significant annual decline of 16.7% in July, reflecting improvements in energy market conditions. In parallel, the Intuit QuickBooks Small Business Index reported a 0.98% month-to-month increase in employment within the corresponding natural resources and mining sector — confirming a positive trend for this industry, and demonstrating how accurate the Index is at reflecting industry trends.


“On a different note, the sharpest price increase reported by the Bureau of Labor Statistics was in the ‘shelter’ category, which reflects current housing costs which are up 7.8%. From the Intuit QuickBooks Small Business Index, we see that one of the steepest declines in small business employment in July has been in the leisure and hospitality sector, with a decrease of 0.13%. Notably, this decline was second only to the manufacturing sector, which experienced a larger drop of 0.22%. These figures highlight the dynamic nature of the small business economy, where certain sectors thrive while others face headwinds. It underscores the importance of adaptability and resilience for small businesses to navigate the ever-changing market conditions successfully.


“The positive atmosphere in the overall economy was reflected in the fact that all eight US regions showed positive growth in July, according to the Index. The Plains and Great Lakes regions recorded the highest growth, with 0.93% and 0.78% respectively. The Great Lakes region had the largest net employment change this month with almost 15,000 new jobs created. These increases in small business employment reported in the Index are corroborated by a corresponding decrease in unemployment insurance claims in July. In particular, Michigan recorded 1,434 fewer weekly initial claims in the week ending July 8 compared to the previous week. Michigan reported to the U.S. Department of Labor that this was driven by fewer layoffs in the automobile, management of companies and enterprises industries.”


Get all the details from the interactive Small Business Index dashboard.


More information

Media inquiries

Media contact details for QuickBooks in the US can be found here on the Intuit website.

Canada Index

The Intuit QuickBooks Small Business Index is also published monthly in Canada. Get the latest small business employment insights for Canada here. 

UK Index

The Intuit QuickBooks Small Business Index is also published monthly in the UK, a few days after the US and Canada. Get the latest small business hiring insights for the UK on August 7.

About the Index

The Intuit QuickBooks Small Business Index is a timely new measure of small business employment and hiring in the US, Canada, and the UK. The Index launched in March 2023 and is updated monthly. The Index uses purpose-built economic models to normalize anonymized QuickBooks data to reflect the general population of small businesses in each country; it is not a reflection of Intuit’s business. The Index was developed in collaboration with leading economist Professor Ufuk Akcigit and an international team of researchers and academics.

Methodology

The Intuit QuickBooks Small Business Index creates aggregated data outputs from a sample of anonymized QuickBooks Online Payroll customer records which are calibrated using statistical methods to create modeled results which better reflect the general population of small businesses in each country, as represented by published official statistics. Statistical adjustment ensures the Index truly reflects employment and job vacancy changes rather than trends in the QuickBooks customer base.


Read more or download the full methodology here.

Rounded values

Total and monthly changes in employment and job vacancies have been rounded to the nearest hundred. Monthly changes and growth rates are calculated before total employment or job vacancy values are rounded. Rates have been rounded to the nearest hundredth.

Seasonal adjustments

The Index’s data insights are seasonally adjusted to limit the effect of seasonal patterns in employment and hiring throughout the year, which lead to regular fluctuations in workforce growth and contraction.

Employment growth formula

Employment growth(t) = [Employment(t)-Employment(t-1)]/[0.5*Employment(t)+0.5*Employment(t-1)]

*Employment levels

The Index produces a monthly prediction of employment growth rates by country, region, and sector. In order to translate these growth rates into the number of jobs/vacancies gained or lost, the growth rates are multiplied by the prior month’s predicted employment levels, except during the months when official statistics are published. During those months, the latest official employment levels that have been reported are used in the calculation instead of the Index’s prior month’s predicted employment levels. As a result, the Index’s predicted total employment levels may at times differ from the predicted growth rates. Official statistics are published at different frequencies depending on the country ranging from monthly to quarterly.

Time series

The Index uses data going back to January 2015 in the US and Canada and to January 2018 in the UK. Published at the earliest opportunity every month, the Index shows the number of people employed by small businesses (in the US and Canada) or the number of job vacancies at small businesses (in the UK) in the previous month and how that number has changed since the month before. The Index helps to eliminate almost all of the time lags in official statistics by providing estimated projections of what those statistics will ultimately show when they are published.

Sample sizes

The total sample across all three countries is around 424,000 small businesses. The US sample is almost 333,000 small businesses. The Canadian sample is almost 66,000 small businesses. The UK sample is almost 25,000 small businesses. The minimum sample sizes for regions or sectors to be included in the Index are 1,000 small businesses in the US, 800 small businesses in Canada, and 200 small businesses in the UK. 

Target populations

In the US and UK, the Index targets the populations of small businesses with one to nine employees. In Canada, the target population is small businesses with one to 19 employees. The differences ensure the Index’s data insights are consistent with official statistics in each country, which are used for benchmarking during the calibration process. Timely data insights for these populations of small businesses are particularly valuable since most datasets fail to cover this portion of the economy well. Please note: Unlike in the US and Canada, the UK Index uses job vacancy data for calibration rather than employment data because official employment statistics are not currently available for small businesses on a monthly basis. 

External data sources

External data sources used alongside the samples of anonymized QuickBooks Online Payroll customer data include:

Geographic regions

Industry sectors

Disclaimer

This content is for information purposes only and should not be considered legal, accounting or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by region, state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit does not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published. Readers should verify statements before relying on them.

We provide third-party links as a convenience and for informational purposes only. Intuit does not endorse or approve these products and services, or the opinions of these corporations or organizations or individuals. Intuit accepts no responsibility for the accuracy, legality, or content on these sites.



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