U.S. Small Business Job Growth Remains Largely Unchanged in May

Hourly earnings growth reaches new four-year low

In May, job growth in U.S. small businesses remained largely unchanged from April, according to the Paychex Small Business Employment Watch. The Small Business Jobs Index, which is a primary component of Paychex’s monthly employment report for businesses with fewer than 50 employees, has continued to show steady, flat employment growth throughout 2025. Meanwhile, hourly earnings growth for U.S. small business workers reached a four-year low at 2.77% in May.

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The latest Paychex Small Business Employment Watch indicates job growth in businesses with under 50 employees has remained largely unchanged in 2025.

“Despite the rapidly changing news cycle, the underlying labor market remains fundamentally healthy, and small business owners have remained resilient,” said John Gibson, Paychex president and CEO. “While inflation concerns remain for business owners, wage inflation in small businesses continued to moderate and reached a new four-year low in May.”

Jobs Index and Wage Data Highlights

• At 99.81 in May, the national Small Business Jobs Index continued to report steady, flat employment growth in 2025.
• National hourly earnings growth (2.77%) for small business workers continued its slow descent to a new four-year low (May 2021: 2.74%).
• Three-month annualized hourly earnings growth (2.45%) fell to its lowest level since December 2020 (1.66%).
• The Midwest (100.19) 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 for the 14th consecutive month in May.
• 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 last among sectors for the fourth consecutive month at 98.18 in May.

More Information

For more information about the Paychex Small Business Employment Watch, visit the website and sign up to receive monthly Employment Watch alerts.

*Information regarding the professions included in the industry data can be found at the Bureau of Labor Statistics website.

About the Paychex Small Business Employment Watch

The Paychex Small Business Employment Watch is released each month by Paychex, Inc. Focused exclusively on businesses with fewer than 50 workers, the monthly report offers analysis of national employment and wage trends and examines regional, state, metro, and industry sector activity. Drawing from the payroll data of approximately 350,000 Paychex clients, this powerful industry benchmark delivers real-time insights into the small business trends driving the U.S. economy. The jobs index is scaled to 100, which represents no year-over-year change in job growth among same store businesses. Index values above 100 represent new jobs being added, while values below 100 represent jobs being lost.

About Paychex

Paychex, Inc. (Nasdaq: PAYX) is the digitally driven HR leader that is reimagining how companies address the needs of today’s workforce with the most comprehensive, flexible, and innovative HCM solutions for organizations of all sizes. Offering a full spectrum of HR advisory and employee solutions, Paychex pays 1 out of every 11 American private sector workers and is raising the bar in HCM for nearly 800,000 customers in the U.S. and Europe. Every member of the Paychex team is committed to fulfilling the company’s purpose of helping businesses succeed. Visit paychex.com to learn more. Visit paychex.com to learn more.

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