Hourly earnings growth for small business employees dropped to a four-year low at 2.77% in May, while job growth was flat, according to payroll company Paychex.

The Paychex Small Business Employment Watch, which tracks U.S. business with fewer than 50 employees, found that three-month annualized hourly earnings growth fell to its lowest level in May (2.45%) since December 2020, when it was 1.66%.

“There seems to be a very limited amount of dynamism in small businesses right now,” said Frank Fiorille, vice president of risk management, compliance and data analytics at Paychex. “We’re not seeing blockbuster or torrid hiring, but we’re also not seeing major layoffs either. They’re in a frozen state. They don’t want to take any risks.”

The Midwest has represented the strongest region for small business employment growth for the past year, while the West continues to lag all regions and reported an index level below 100 on Paychex’s Small Business Jobs Index for the 14th consecutive month in May. 

“The Midwest is doing well, and the coasts are lagging a little bit,” said Fiorille. 

Construction dropped 0.68 percentage points to a jobs index of 99.69 in May, marking its lowest level since March 2021. Job growth in the leisure and hospitality industry remained in last place among sectors for the fourth month in a row at 98.18 in May.

Uncertainty over tariffs and the massive tax bill in Congress seem to be holding back small businesses, and accountants should keep a close eye on developments to advise their small business clients. “That’s the ballgame right now for everybody to watch,” said Fiorille.

Tesla Inc.’s shares sank as Elon Musk and President Donald Trump’s simmering feud devolved into a public war of words between two of the world’s most powerful people.

Trump on Thursday said he was “very disappointed” by the Tesla chief executive officer’s criticism of the president’s signature tax policy bill. Musk fired back in several social media posts, saying in one that “without me, Trump would have lost the election.”  

The president later floated terminating federal contracts and subsidies extended to Musk’s companies and said that he had asked the Tesla and SpaceX leader to leave his administration, which Musk said was a “lie.” 

Tesla’s shares dropped 14% on Thursday in New York, the stock’s biggest decline since March 10. The rout erased about $150 billion from the electric-vehicle maker’s market value. 

The spectacle of the world’s richest person and the leader of the free world lobbing insults toward one another on social media marks a stunning breakup of a once formidable political alliance. 

Musk spent more than $250 million to help secure Trump’s return to the White House. Trump in turn deputized Musk to lead a sweeping effort to slash government spending and reshape the federal bureaucracy before the mercurial billionaire stepped back from that role last week.

At the same time, policies advanced by Trump and Republican lawmakers put billions of dollars at risk for Tesla, by far Musk’s largest business.

Trump’s massive tax bill would largely eliminate a credit worth as much as $7,500 for buyers of some Tesla models and other electric vehicles by the end of this year, seven years ahead of schedule. That would translate to a roughly $1.2 billion hit to Tesla’s full-year profit, according to JPMorgan analysts.

After leaving his formal advisory role in the White House last week, Musk has been on a mission to block the president’s signature tax bill that he described as a “disgusting abomination.” The world’s richest person has been lobbying Republican lawmakers — including making a direct appeal to House Speaker Mike Johnson — to preserve the valuable EV tax credits in the legislation.

Separate legislation passed by the Senate attacking California’s EV sales mandates poses another $2 billion headwind for Tesla’s sales of regulatory credits, according to JPMorgan. 

Taken together, those measures threaten roughly half of the more than $6 billion in earnings before interest and taxes that Wall Street expects Tesla to post this year, analysts led by Ryan Brinkman said in a May 30 report.

Tesla didn’t immediately respond to a request for comment.

The House-passed tax bill would aggressively phase-out tax credits for the production of clean electricity, and other sources years earlier than scheduled. It also includes stringent restrictions on the use of Chinese components and materials that analysts said would render the credits useless and limits the ability of companies to sell the tax credits to third parties.

Tesla’s division focused on solar systems and batteries separately criticized the Republican bill for gutting clean energy tax credits, saying that “abruptly ending” the incentives would threaten U.S. energy independence and the reliability of the power grid.

The clean energy and EV policies under threat were largely enacted as part of former President Joe Biden’s Inflation Reduction Act. The law was designed to encourage companies to build a domestic supply chain for clean energy and electric vehicles, giving companies more money if they produce more batteries and EVs in the U.S. Tesla has a broad domestic footprint, including car factories in Texas and California, a lithium refinery and battery plants.

With those Biden-era policies in place, U.S. EV sales rose 7.3% to a record 1.3 million vehicles last year, according to Cox Automotive data.

DMJPS PLLC, a Regional Leader based in Greensboro, North Carolina, is adding Potter & Company P.A., a firm based in the Charlotte metropolitan region, effective July 1.

Potter has offices in Monroe, Concord and Mooresville, North Carolina. Financial terms of the deal were not disclosed. DMJPS earned $32 million in annual revenue, while Potter had $8 million. 

The deal brings in 17 equity partners, with 12 from DMJPS and five from Potter. DMJPS has over 165 employees and Potter has more than 44. The combined firm will have more than 200 employees, 25 partners and 10 office locations across North Carolina; Greensboro, Asheville, Boone, Concord, Durham, Marion, Monroe, Mooresville, Sanford and Wilmington. 

“We are growing through purpose,” said DMJPS co-CEO Drew Haddock in a statement. “We’re a firm built in North Carolina — and we’re doubling down on that commitment.”

“DMJPS approaches strategic growth with one mission; empower through expertise, delivering personalized, proactive solutions that build trust, drive innovation, and inspire our people, clients, and communities to Be Greater,” added ci-CEO Mike Gillis.

The expanded firm will continue to offer accounting and advisory services along with strengthened capabilities in business valuations, fractional CFO, client accounting, international tax consulting, litigation support, and succession planning, as well as medical and dental practice consulting through DMJPS Healthcare.

“This transition is seamless because it reflects the shared values and unwavering commitment we have to our people, our clients, and the communities we serve,” said Potter managing partner Todd Plyler in a statement. “Together, we’re forming a stronger, more diverse team that’s deeply focused on helping North Carolina’s businesses and organizations not just grow but truly thrive.”

DMJPS’s origins date back to 1949, but the name arose when two North Carolina firms, DMJ & Co. PLLC in the eastern part of the state and Johnson Price Sprinkle PA in the west, merged to create DMJPS in 2022.