According to the January Paychex Small Business Employment Watch, job and wage growth trends among U.S. small businesses remained consistent to start 2026. The Small Business Jobs Index — which reflects the payroll data of a subset of Paychex clients with fewer than 50 employees — increased 0.04 percentage points to 99.30 in January. Additionally, hourly earnings growth for workers has remained essentially unchanged since July 2025 at 2.68%.
“As we enter 2026, the pace of employment and wage growth for America’s small businesses remains on a similar path that we saw in 2025,” said John Gibson, Paychex president and CEO. “Our Small Business Job Index, combined with other information, continues to point to an economy that is expanding at a solid pace without significant inflation pressure from wages. While we anticipate potential economic tailwinds from last year’s tax bill to come to fruition in 2026, our HR professionals consistently hear from our clients that they continue to navigate persistent challenges with the supply of qualified labor and rising healthcare costs.”
Jobs Index and Wage Data Highlights
- The national jobs index (99.30) increased 0.04 percentage points from December 2025 and 0.03 percentage points from last quarter.
- Hourly earnings growth has been below three percent since November 2024, including 2.68% in January.
- Weekly earnings growth slowed to 2.53% in January. Additionally, the one-month annualized weekly earnings growth (1.62%) has been below two percent for the last three months. The last time one-month annualized weekly earnings growth was below two percent for three-straight months was December 2020.
- The Midwest remained the top region for small business job growth for the 20th consecutive month.
- Education and Health Services (100.57) led sectors for small business job growth for the 20th consecutive month and has reported growth for nearly five-straight years.
