National hourly earnings growth for small business employees reached its lowest level since December 2020 at 2.58%, continuing to trend below 3% for the 10th consecutive month, according to HR and payroll company Paychex.
The Small Business Jobs Index, which is a primary component of the Small Business Employment Watch report, measures the pace of job growth nationwide using payroll data from Paychex’s small business customers. At 99.83 in August, the national jobs index level has been consistent for the last quarter (+0.02 percentage points) and year (-0.06 percentage points).
“Our latest employment data once again underscores the stability and resilience of the small business labor market,” Paychex President and CEO John Gibson said in a statement. “Although job growth has remained flat over the last year, the continued decline in wage inflation should create a more favorable environment for small business owners seeking to hire and compete for talent. All regions across the country have experienced hourly earnings growth below 3% since April.”
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.
Other jobs index and wage data highlights include:
- The national Small Business Jobs Index for August (99.83) was 0.06 percentage points off the pace set in August 2024 (99.89).
- Though modest, the national jobs index has reported consecutive month-over-month gains for the first time since June 2023.
- The Midwest (100.29) has led all regions in small business employment growth for the past 15 months.
- Texas’ jobs index rose by 1.13 percentage points from the previous month in August (101.80), ranking first among states and marking its highest pace of job growth since March 2024 (102.63). Leading the way, Dallas (101.04) reclaimed the top spot among metros in August, while neighboring Houston (100.90) trailed closely behind at No. 2.
- Education and health services (101.28) was the strongest sector across all four regions in August and has led all sectors in small business job growth nationally for the 15th consecutive month.
- The manufacturing jobs index (99.20) increased 0.58 percentage points in August from July. It’s the only sector with a 2025 year-to-date average pace of job growth (98.72) that surpasses its average pace in 2024 (98.65).
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Tags: employees, employment, labor market, paychex, Payroll, Small Business, wages
