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U.S. Small Business Employment Holds Steady Through First Half of 2025

1. Small business job growth index at 99.65 shows stability in June. 2. Hourly earnings growth remains below three percent at 2.79%. 3. Small businesses adopting a cautious approach to hiring amid macroeconomic uncertainty. 4. The Midwest continues to lead small business job growth for 13 months. 5. Manufacturing sector experienced significant job index changes in June.

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FAQ

Why Neutral?

Stable job growth reflects a cautious outlook, which is neutral for PAYX.

How important is it?

Current employment trends highlight the stability of PAYX's core market, but caution from businesses could limit growth.

Why Short Term?

Immediate labor data may influence hiring trends affecting PAYX services in upcoming quarters.

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-Hourly earnings growth continues to trend below three percent in June ROCHESTER, N.Y.--(BUSINESS WIRE)--The small business labor market has remained stable with minimal changes observed through the first half of 2025, according to the Paychex Small Business Employment Watch. The pace of job growth in U.S. businesses with fewer than 50 employees has fluctuated less than half a percentage point over the last six months, reporting a 99.65 index level for June. At the same time, hourly earnings growth for small business workers continued to trend below three percent at 2.79%. “Regardless of an uncertain and dynamic macroenvironment, the small business labor market remains stable and fundamentally healthy,” said John Gibson, Paychex president and CEO. “We’re seeing many organizations take a more measured approach to strategic decision-making – including hiring – as business owners wait for greater clarity on macro issues, such as tariffs, inflation, and taxes. This ‘wait and see’ approach is reflected in our small business jobs data through the first half of the year, which has shown modest month-to-month movement since January.” Jobs Index and Wage Data Highlights The national small business jobs index moderated 0.16 percentage points to 99.65 in June. Hourly earnings growth remained steady and consistent at 2.79% in June, trending just below three percent for 10 of the past 11 months. Since falling below four percent in July 2023, hourly earnings growth has averaged a monthly decrease of 0.05%. With a jobs index level of 100.15, the Midwest remained the top region for small business job growth for the 13th-straight month. The Midwest, South, and Northeast regions slowed slightly in June but have held or improved their pace of job growth during the past quarter. Ohio (101.04) regained the top rank among states for small business job growth in June with all sectors other than Construction reporting a jobs index above 100. Dallas (100.82) ranked No. 1 among the largest U.S. metros for small business employment growth in June, led by strong job gains in Construction. Manufacturing’s small business jobs index (98.80) recorded the largest one-month (0.40 percentage points) and 12-month (0.18 percentage points) change rates among sectors in June. More Information For more information about the Paychex Small Business Employment Watch, visit the website and sign up to receive monthly Employment Watch alerts. 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. *Information regarding the professions included in the industry data can be found at the Bureau of Labor Statistics website. 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. More News From Paychex, Inc.

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