The latest Paychex Small Business Employment Watch reveals that job growth among U.S. small businesses remains stable, with the Paychex Small Business Jobs Index reaching 99.75 in March. Meanwhile, hourly earnings growth for workers in small businesses stood at 2.91%, marking the fifth consecutive month below three percent.
“According to our most recent data, the small business labor market is fundamentally healthy and showing no current signs of a recession,” said John Gibson, President and CEO of Paychex.
Despite ongoing economic uncertainty, inflation concerns, and hiring challenges, small businesses continue to demonstrate resilience and optimism. Paychex remains committed to providing innovative workforce solutions, such as Paychex Recruiting Copilot, Paychex Flex® Perks, and Paychex Funding Solutions, to support small- and mid-sized businesses.
Findings from the March Report
1. U.S. Small Business Jobs Index Trends
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The Small Business Jobs Index dipped slightly by 0.29 percentage points, landing at 99.75 for March.
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This aligns with the steady job growth trends observed over the past several quarters.
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The Midwest remained the top-performing region for the 10th consecutive month (99.96).
2. Wage Growth Insights
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Hourly earnings growth remained at 2.91%, marking the fifth-straight month below 3%.
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One-month annualized hourly earnings growth reached 3.51%, outpacing the annual growth rate of 2.91% for the fourth month in a row.
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Tampa led U.S. metros in hourly earnings growth (4.20%) and weekly earnings growth (4.00%).
3. State and Metro-Level Job Growth Highlights
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Texas (100.85) continued to lead in small business job growth.
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Minneapolis (102.52) saw the largest metro job growth increase, gaining 1.87 percentage points to take the top spot.
4. Industry Trends
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The Manufacturing sector saw the best quarterly job growth, gaining 1.05 percentage points in Q1 2025.
While small businesses continue to navigate economic headwinds, the labor market remains stable, with steady hiring and controlled wage growth. As the business landscape evolves, companies must leverage strategic hiring and compensation strategies to attract and retain top talent.
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