Paychex Small Business Employment Watch: U.S. Job Growth Remains Stable in July with Midwest Leading Regional Employment Growth

US small business job growth remains stable in July with a national Small Business Jobs Index of 99.82. Hourly earnings growth is below three percent at 2.74%, consistent with historical averages. The Midwest leads regional small business employment growth, with Ohio and Indiana at the forefront. The Education and Health Services sector has been the top performer for small business job growth for 14 consecutive months.

According to the latest Paychex Small Business Employment Watch report for July 2025, job growth among U.S. small businesses with fewer than 50 employees remains stable. The national Small Business Jobs Index, a key indicator of the pace of job growth, increased by 0.17 percentage points to 99.82 in July, matching the year-to-date index level [1]. This consistent trend signals a stable job market for small businesses across the country.

Hourly earnings growth for small business workers has maintained a consistent trend, remaining below three percent (2.74%) for the ninth consecutive month. This figure is in line with historical averages seen from 2014 to 2020 [1]. While wages have been relatively stagnant, there has been a positive increase in weekly hours worked in July for the first time since August 2024, with a one-month annualized increase of 2.31% [1].

Regional analysis shows that the Midwest continues to lead in small business employment growth. Ohio, with a jobs index of 101.09, and Indiana, with an index of 100.89, are the top-performing states in the region [1]. Education and Health Services remains the sector with the highest small business job growth for the 14th consecutive month [1].

Leisure and Hospitality, however, continues to lag behind, with a jobs index of 98.35 in July. Despite this, the sector saw the largest one-month gain (0.59 percentage points) among industries [1]. The report highlights the resilience of small businesses in the face of ongoing economic uncertainty.

For more information about the Paychex Small Business Employment Watch, visit the Paychex website and sign up for monthly Employment Watch alerts [1].

References:
[1] https://www.marketscreener.com/news/u-s-small-business-job-growth-remains-stable-in-july-ce7c5fd9d18aff2c