Paychex Inc. has released its latest findings from the Paychex Small Business Employment Watch, showing that job growth among U.S. businesses with fewer than 50 employees remained stable in March, with the Small Business Jobs Index standing at 99.75. This figure indicates consistent employment levels, mirroring trends observed over the last several quarters. The report also highlighted wage growth, with hourly earnings growth recorded at 2.91%, remaining unchanged from previous months.

2. Insights from Leadership

John Gibson, President and CEO of Paychex, commented on the findings, stating, “According to our most recent data, the small business labor market is fundamentally healthy and showing no current signs of a recession.” He noted that while job growth is stable, wage growth has remained below three percent for the fifth consecutive month, an important statistic for understanding the economic landscape for small businesses.

Gibson further elaborated on the mixed sentiment among small business owners, who are experiencing both optimism and uncertainty. He pointed out the ongoing challenges they face, particularly with inflation and the difficulty of finding qualified employees. In response, Paychex has been proactive in developing innovative solutions, such as Paychex Recruiting Copilot, Paychex Flex® Perks, and Paychex Funding Solutions, aimed at supporting small and mid-sized businesses.

3. Detailed Job Index and Wage Data Highlights

Small Business Jobs Index: The national Small Business Jobs Index saw a slight decline of 0.29 percentage points, settling at 99.75 in March. This figure is just below the pace recorded at the end of the last two quarters.

Hourly Earnings Growth: The growth rate for hourly earnings stood at 2.91%, remaining below three percent for the fifth month in a row. However, one-month annualized hourly earnings growth of 3.51% has outpaced annual growth for the fourth consecutive month.

Regional Performance: The Midwest region continued to lead with an index of 99.96, despite a decrease of 0.58 percentage points in March. Texas topped the states for small business job growth with an index of 100.85.

Metropolitan Insights: Minneapolis emerged as a leader among metropolitan areas, gaining 1.87 percentage points to reach 102.52. This marks a significant upward trend for the city in recent months.

Industry Trends: The Manufacturing sector showed robust performance, with the index increasing by 1.05 percentage points during the first quarter of 2025, making it the best-performing sector overall. Tampa also reported impressive wage growth, leading in both hourly earnings (4.20%) and weekly earnings (4.00%).

4. Conclusion

The latest report from Paychex paints a picture of a resilient small business sector, demonstrating stability in job growth and ongoing challenges in wage growth and labor qualification. While small business owners express optimism, the economic environment remains complex, influenced by inflation and workforce challenges. Paychex's commitment to providing innovative solutions is crucial in helping these businesses navigate the evolving landscape.

For continuous insights into employment and wage trends, the Paychex Small Business Employment Watch remains a vital resource for understanding the dynamics of small businesses in the U.S.

Original press release