Hourly earnings growth below three percent for the 17th consecutive month

According to the Paychex Small Business Employment Watch, 2025 marked a year of consistency for U.S. small business job and wage growth trends. The monthly report’s Small Business Jobs Index, which reflects the payroll data of Paychex’s customers with fewer than 50 employees, experienced minimal change throughout the year and averaged 99.67 in 2025. Meanwhile, hourly earnings growth (2.71%) closed the year below three percent for the 17th consecutive month.

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The Paychex Small Business Employment Watch showed little change in the pace of job growth in 2025, while hourly earnings growth remained below three percent all year.

“The latest read on our data reveals a continued moderation in wage inflation and little change in the rate of job growth among America's small businesses in 2025, with certain regions like the Midwest and sectors such as healthcare demonstrating strength throughout the year,” said John Gibson, Paychex president and CEO. “Looking more broadly across our client base, the pace of job growth among our U.S. customers with more than 50 employees was stronger to close the year and resulted in flat employment levels overall.”

Jobs Index and Wage Data Highlights

• The national small business jobs index averaged 99.67 in 2025 and ended the year at 99.26 in December.
• Hourly earnings growth has reported below three percent since August 2024 and increased slightly to 2.71% in December, just below the 2025 average (2.74%).
• Weekly hours worked growth closed the year up 0.25%, marking the highest level since May 2021.
• The Midwest was the top region for small business employment growth for all of 2025, though the region tied with the Northeast with a 99.65 jobs index in December.
• Averaging an index level of 100.52 in 2025, Indiana (101.50) started and ended the year ranked first among states for small business employment growth.
• Education and Health Services (100.49) led industry sectors for small business job growth every month in 2025 and has reported positive growth for nearly five consecutive years.

More Information

Since 2014, the Paychex Small Business Employment Watch has been a trusted source of employment trends for U.S. small businesses with fewer than 50 employees. The Employment Watch website offers interactive charts and historical data across the report’s two key components – the jobs index and wage data. Visit the Bloomberg Terminals or subscribe to receive monthly alerts with the latest data.

About the Paychex Small Business Employment Watch

The Paychex Small Business Employment Watch is released each month by Paychex, Inc. Only 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. Drawing from the payroll data of approximately 350,000 Paychex clients, this industry benchmark delivers real-time insights into the small business trends driving the U.S. economy.

*Information regarding the professions included in the industry data can be found at the Bureau of Labor Statistics website.

About Paychex

Paychex, Inc. (Nasdaq: PAYX) is the digitally driven HR leader that is reimagining how companies address the needs of today’s workforce with the most comprehensive, flexible, and innovative HCM solutions for organizations of all sizes. Offering a full spectrum of HR advisory and employee solutions, Paychex pays 1 out of every 11 American private sector workers and is raising the bar in HCM for approximately 800,000 customers in the U.S. and Europe. Every member of the Paychex team is committed to fulfilling the company’s purpose of helping businesses succeed. Visit paychex.com to learn more.

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