In an interview with Jim Cramer on CNBC on Tuesday, Paychex CEO John Gibson cited his company’s report on employment data last month, suggesting that small businesses are patient despite uncertainty in the economic landscape.
“We just reported employment reports a few hours ago and the small business labor market has continued to make very small changes to what we saw all year round,” Gibson said. “Stable employment growth, wage inflation is below 3% and there are really no signs of a recession. We continue to see strong demand for solutions. All of this shows me that small and medium-sized businesses are resilient in this economy.”
Paychex provides services to small and medium-sized businesses, including HR and salaries. The company was able to beat Wall Street expectations reported Wednesday and raise its annual revenue outlook. However, stocks slipped during Tuesday’s session, with stocks falling closely by 1.38%.
According to Gibson, the company’s optimism has been driven by successful revenues, a consolidation of its recent acquisition, Paycorp, and the seemingly stable job market for small and medium-sized businesses.
Gibson said small business owners are more clear about the future than they did a few months ago, as President Donald Trump’s megaville passed, and knows more about tax credits for next year. He also said these companies were heartfelt in the Federal Reserve decision to lower the benchmark borrowing rate, and that the cut was a sign of owners that “there could be some relief from an interest rate standpoint.”
Gibson also mentioned what government shutdowns mean for small businesses, saying he doesn’t think there will be “wholesale, major issues” unless the shutdown lasts for a long time. However, he suggested that closures, such as restaurants and other businesses in Washington, D.C., would affect the “pocket” of the market.
“If we’re going into the long term now, we have to reevaluate it,” Gibson said. “But again… I don’t think that’s a big factor at this point.”
