ROCHESTER, N.Y. — U.S. small businesses accelerated their hiring pace for the second consecutive month in April, marking a significant rebound in the labor market despite a volatile economic backdrop.
According to the latest Paychex Small Business Employment Watch released Tuesday, the national jobs index rose by 0.35 percentage points to reach 99.16. The jump represents the largest single-month increase in hiring activity since February 2025 and the strongest two-month gain the sector has seen in over three years.
“Consecutive gains in the pace of employment and weekly hours worked demonstrate remarkable resilience among small business owners,” said John Gibson, Paychex president and CEO.
Key Findings: Growth and Stability
While hiring picked up speed, wage inflation appeared to remain in check. Hourly earnings growth held steady at 2.71%, marking the 18th straight month that wage increases have stayed below the 3% threshold.
In a further sign of operational strength, weekly hours worked saw positive growth for the second month in a row—a trend Paychex analysts noted has occurred only twice in the last five years.
Regional and Sector Highlights
The hiring surge was felt nationwide, with all four major U.S. regions reporting an increased pace of employment.
- The Midwest continued its 23-month streak as the top region for small business job growth, led largely by Wisconsin, which boasted the highest index among states (100.84).
- The Northeast and West saw the most dramatic monthly improvements, gaining 0.56 and 0.50 percentage points, respectively.
- Philadelphia emerged as the top-performing metropolitan area for small business employment.
From an industry perspective, the Construction sector led the charge with a 0.64 percentage point increase. Construction activity was particularly robust in the Midwest and Northeast, though it lagged slightly in the South and West.
An Uncertain Horizon
While the April data offers a glimmer of optimism, Gibson noted that small business owners are still navigating an “increasingly uncertain macroenvironment.” He emphasized that the focus for many remains on long-term positioning, particularly as they prepare for the impact of upcoming 2025 tax changes.
The Paychex Small Business Employment Watch utilizes payroll data from a subset of Paychex clients with fewer than 50 employees, providing a real-time pulse on the sector that employs nearly half of the American private-sector workforce.