Small Business Job Growth Holds Steady in October

Paychex data shows U.S. small businesses held job growth flat while hourly earnings stayed below three percent for 26 months.

Updated on Nov. 3, 2026 in Employment

Small Business Job Growth Holds Steady in October

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Job growth among U.S. small businesses with fewer than 50 employees held steady in October, according to the Paychex Small Business Employment Watch. The national jobs index rose 0.06 percentage points to 99.21, while hourly earnings growth remained below three percent for the 26th consecutive month.

Why it matters

Employers met demand largely by increasing hours among their existing workforce rather than adding staff. The steady pace of small business hiring and modest wage gains offer a view of conditions for the many American workers employed by firms of this size.

The national jobs index reached 99.21 in October, a 0.06-point gain from September but below the 99.27 recorded a year earlier. Hourly earnings grew 2.88% and weekly hours worked rose 0.11%, though the report does not explain the cause of the lag between hours and headcount.

The players

Paychex

Paychex is a Rochester, New York-based payroll and human capital management company that publishes the Small Business Employment Watch and serves roughly 840,000 customers.

The details

Arizona led states for small business job growth at 100.85 for a third straight month, and Phoenix led metros at 101.57 on gains in manufacturing. The Midwest ranked first among regions at 99.51, and more than half of the states analyzed increased their pace of job growth in October.

- October 2026: Small business job growth held steady and hourly earnings growth stayed below three percent.
- November 3, 2026: Paychex published the Small Business Employment Watch report.

Market Landscape

The October jobs index of 99.21 sits just below the 99.27 level from a year ago, indicating small business hiring has moved sideways rather than accelerating over the past year. Hourly earnings growth below three percent for 26 consecutive months points to a sustained period of modest wage gains among firms with fewer than 50 employees.

Workers at small firms may see steady hours but limited pay raises, since hourly earnings have stayed below three percent for more than two years. Households tracking grocery and rent costs should note that wage growth has not kept pace with broader price pressures in the data.

The takeaway

Small business employers are relying on longer hours from current staff rather than hiring, so job seekers may find openings limited while existing employees see little pressure on wages. Tracking monthly releases of the jobs index can help gauge whether that pattern is shifting.