In a recent press release dated March 4, 2025, Paychex Inc. unveiled its latest findings from the Paychex Small Business Employment Watch, revealing a stable employment environment for small businesses across the United States. The Small Business Jobs Index measured a moderate job growth level of 100.04, indicating a continued resilience within the small business sector, which predominantly consists of businesses with fewer than 50 employees.

2. Key Employment Metrics

The report highlighted several crucial statistics that paint a picture of the current employment landscape:

Jobs Index: The national jobs index rose to 100.04 in February, maintaining a steady trajectory of job growth.

Hourly Earnings Growth: Small business workers experienced a modest hourly earnings growth rate of 2.92%, which has remained below the three percent mark for the fourth consecutive month. This growth has been consistent, fluctuating only slightly between 2.90% and 3.01% over the past seven months.

Regional Performance: The Midwest led the nation for the ninth month in a row with a jobs index level of 100.54, showcasing its dominance in small business employment.

State and Metro Insights

In a detailed breakdown of state performances, seven out of the 20 states analyzed recorded gains of more than one percentage point in February. Notably, Texas emerged as the leader with an impressive increase of 2.11 percentage points.

Among major metropolitan areas, Phoenix stood out with a jobs index of 101.92, marking the fourth consecutive month of accelerated small business job growth and solidifying its position as the top metro for small business employment.

3. Sector-Specific Analysis

The report also delved into industry-specific trends, revealing that the construction sector experienced the highest hourly earnings growth at 3.29%. Other Services and Manufacturing closely followed, reporting growth rates of 3.27% and 3.21%, respectively. Notably, the Manufacturing sector marked a significant comeback with a 2.39 percentage point increase in job growth, bringing its index to 99.52—its largest monthly gain since April 2021.

4. Insights from Leadership

John Gibson, Paychex president and CEO, shared insights on the current employment landscape, emphasizing the stability and resilience of the small business labor market. He noted the moderate job and wage growth, alongside the cautious optimism that small business owners possess regarding future business conditions despite the uncertainties posed by a rapidly changing legislative and regulatory environment.

5. Conclusion and Future Outlook

The Paychex Small Business Employment Watch serves as a pivotal resource for understanding employment trends within the small business sector. By analyzing payroll data from approximately 350,000 clients, Paychex provides real-time insights that are essential for businesses navigating the current economic landscape.

With a sustained jobs index above the baseline of 100, the outlook for small business employment appears promising. As Paychex continues to monitor these trends, stakeholders in the small business community remain hopeful for continued growth and adaptation in the face of evolving challenges.

For those interested in further details about the Paychex Small Business Employment Watch, additional information can be found on their website, where monthly Employment Watch alerts can be subscribed to for ongoing updates.

Original press release