The long trend of increases in hiring and payrolls extended in September, making it 10 consecutive months of higher activity in both areas, according to an analysis of 18,000 small businesses' payroll data by the SurePayroll Small Business Scorecard. The hiring index rose 34 points to 10,788, bringing the year-to-date hiring increase to a healthy 3.3 percent. Salaries rose as well, but more slowly, increasing 2 points during the month. For all of 2007, salaries were up 3.5 percent.

In the same survey, business owners reported a sharp increase in confidence. More than 78 percent were confident about the economy in September, up from 69.5 percent the previous month. "That's one of the biggest month-to-month changes ever," says Michael Alter, president of SurePayroll Inc. The confidence rebound was likely due to lower interest rates and less concern about the effects of troubles in the subprime mortgage market, he adds.

In September, the South and the West had the biggest hiring increases, up 0.4 percent each. The West's 0.4 percent salary boost was also the month's biggest. Only the Midwest showed weakness in hiring or salaries, as salaries fell 0.3 percent there. Alter says deceleration in wage growth is a positive sign that's likely to continue. "I expect wages to continue to go up, but not at the pace we had in the first half of the year," he says.

Although the year-to-date increase was not uniform nationwide, all regions have recorded increases in both hiring and wages. The West was strongest in both, reporting a 5 percent increase in hiring and 5.3 increase in salaries. The Midwest and the South had the smallest hiring increases--2 percent each--while the Northeast's 0.2 percent salary growth was the weakest.

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