In recent months, economists and regulators have worried about the impact of continued wage increases on inflation and employers’ prospects. After a big rate hike by the Fed, the indicators are slowly starting to come back.
Data from the US and Canada reflect a reduction in small business activity in the new year.
Previous versions of this report have discussed continued concerns over the pace of wage growth and low unemployment claims, and the Fed maintains a strong approach to rate hikes. As signs of an overheating economy begin to wane, Home Base is working to predict the broader economy in early 2023 by analyzing the behavioral data of more than 2 million employees in over 100,000 SMBs. I am trying to understand how the environment affects small businesses and their employees. .
Summary of Findings: Homebase high-frequency timesheet data shows a continued slowdown in working hours and employee working hours across most industries and metropolitan areas.
- January is off to a slow start, continuing its downward trajectoryOn the other hand, 2022 saw an increase in hours worked through the first quarter, but in 2023 employee working hours and levels of hours worked were 4-5 points below the January 2022 mark.
- Industry-wide post-holiday declines are slower than those seen pre-COVID except for nursing care; Labor force participation in entertainment has recovered the most From the holiday low, it was just 2.3% below its mid-December level.
- Working hours across metropolitan areas are slightly below pre-holiday levels. Similar trend to last year; but, January 2023 levels relatively stable throughout the monthrather than rising as in 2021 and 2022.
January got off to a slow start, continuing its downward trajectory. On the other hand, 2022 saw an increase in hours worked through the first quarter, but employee working hours and levels of working hours in 2023 are 4-5 percent below the January 2022 mark.
working employees
(7-day moving average; compared to January of reported year)
![](https://joinhomebase.com/wp-content/uploads/2023/02/f98d7df89d7f89d7f89.png)
Main Street Health Index1
(7-day moving average, compared to Jan 2022)
![](https://joinhomebase.com/wp-content/uploads/2023/02/cds0v9c8d09v8fd0.png)
1. Significant drop due to major US holidays. A noticeable drop in mid-February 2021 coincides with a period that includes the Texas power crisis and severe weather in the Midwest. A late September plunge coincides with Hurricane Ian. Source: Headquarters data.
Post-holiday declines across industries are slower than those seen pre-COVID, with the exception of caregiving. Labor force participation in entertainment recovered the most from its holiday lows, falling just 2.3% below its mid-December level.
Rate of change in working employees
(compared to the January 2022 baseline using a 7-day rolling average)1
![](https://joinhomebase.com/wp-content/uploads/2023/02/cd89sc7s98cd7s.png)
Rate of change in working employees
(Comparing mid-January and mid-December of the previous year, using the baselines of Jan-2022 and Jan-19)1
![](https://joinhomebase.com/wp-content/uploads/2023/02/cds89c7sd89c7ds98c7ds.png)
1. January 15-21 and December 11-17 (2022/2023) and January 12-18 and December 8-14 (2019/2020). Notable dips usually coincide with major US holidays.Source: Headquarters data
Hours worked across metropolitan areas remain slightly below pre-holiday levels, in line with last year’s trends. However, the January 2023 level remains relatively constant throughout the month, rather than rising as it did in 2021 and he in 2022.
working time
(7-day moving average; compared to Jan 2020 (pre-Corona))
![](https://joinhomebase.com/wp-content/uploads/2023/02/cds97cs89c7s9dc.png)
1. Significant drop due to major US holidays. A noticeable drop in mid-February 2021 coincides with a period that includes the Texas power crisis and severe weather in the Midwest. Source: Headquarters data.
For a PDF of the January report, please visit this PDF. Please cite Homebase if you use this data for research or reporting purposes.
Link to PDF: January 2023 Home Base Main Street Health Report