According to the April 2025 Paychex Small Business Employment Watch, job growth among U.S. small businesses with fewer than 50 employees increased slightly, signaling continued labor market resilience. The index rose 0.27 percentage points to 100.02, a sign of stability amid broader economic uncertainties. However, hourly earnings growth slowed to 2.82%, the lowest level recorded since May 2021.
Highlights:
Job Growth and Wage Trends
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The Small Business Jobs Index rose to 100.02 in April 2025, reflecting a 0.27 percentage-point increase.
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The index has averaged 99.99 over the past year, indicating a relatively steady labor market.
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Hourly earnings growth dropped to 2.82%, its lowest rate in nearly four years.
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Weekly hours worked declined slightly by 0.17%, though the one-month annualized growth rate was a positive 2.62%.
Regional and State Performance
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All four U.S. regions saw job index gains in April.
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The Midwest led with a 0.81 percentage-point increase and has now ranked as the top region for 11 consecutive months.
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Ohio experienced a significant 2.24 percentage-point spike, reaching a job index level of 101.94 — the highest of all states since reporting began in 2014.
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Minneapolis led metropolitan areas with a job index of 102.35, topping the charts for a second straight month.
Industry Insights
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The Professional and Business Services sector posted the strongest performance, rising 0.82 percentage points to reach a job index of 100.36.
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This sector’s one-month gain was the largest across all industries in April.
Executive Commentary
“Our April jobs data signals a small business labor market that remains stable as business owners navigate the evolving macroenvironment,” said John Gibson, President and CEO of Paychex. “We see no signs of recession in our data, and many small business leaders appear to be taking a wait-and-see approach until there’s more clarity in the economic landscape.”
Gibson also noted the strategic importance of Paychex’s recent acquisition of Paycor, aimed at expanding workforce solutions during uncertain times.
The April 2025 report underscores a cautiously optimistic labor outlook for small businesses. While job growth shows modest improvement, declining wage growth may prompt business owners and policymakers to reevaluate compensation strategies to retain talent. Regional and sector-specific gains suggest resilience, but continued economic shifts will require close monitoring.
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