Small-business payrolls grew by 0.32 percent in May, the sixth straight month of increases, according to SurePayroll, a Chicago-based payroll services firm.

On a year-to-date basis, hiring at small businesses has grown by 1.8 percent, on pace for a year-end increase in total small-business employment of 4.5 percent. By contrast, small-business hiring shrank by 0.2 percent in 2006, the report said.

At the same time, average annual salaries paid by small employers rose by 0.3 percent in May to $32,142, an $850 increase since January.

Both payrolls and salaries were up in every region, the report said.

Rising salaries likely indicate a growing shortage of quality workers in the labor market, according to SurePayroll president Michael Alter. While higher salaries tend to boost consumer spending, they can also be a burden on smaller employers, Alter said.

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