Job growth in U.S. small businesses with fewer than 50 employees averaged modest employment growth throughout 2024, according to the Paychex Small Business Employment Watch. The national jobs index was relatively unchanged (0.02 percentage points) at the close of the year in December and has held its pace since the summer. At 2.96% in December, hourly earnings growth for U.S. small business workers remained below three percent for the fifth consecutive month.
“The pace of job growth among U.S. small businesses down-shifted slightly as 2024 progressed, yet small businesses remained resilient throughout the year,” said John Gibson, Paychex president and CEO. “As we head into 2025, small business owners continue to face some challenges such as access to growth capital, rising healthcare costs, and ability to hire qualified talent. In spite of this, optimism and hiring intentions improved to close the year – both trends that will be worth watching as we begin 2025.”
“As we have done for more than 50 years, Paychex will continue to focus our efforts in the coming year on designing solutions to support the small business growth that ultimately fuels our broader economy,” Gibson added.
Jobs Index and Wage Data Highlights
- The national small business jobs index averaged 100.22 in 2024, representing modest employment growth. However, the national jobs index slowed 1.32 percentage points from 101.21 in December 2023 to 99.89 in December 2024.
- The Midwest (100.20) remained the top region for small business employment growth for the seventh consecutive month in December. Wisconsin (100.77) led Midwestern states and ranked second among all states for job growth in December, marking its best rank since March 2020.
- For the second-straight month, Dallas (101.73) and Houston (101.16) ranked first and second, respectively, among metros for job growth in December.
- Three-month annualized hourly earnings growth (3.02%) reported above three percent for the first month since April.
- Weekly earnings growth (2.54%) slowed to a four-year low in December. Additionally, weekly hours worked growth (-0.43%) remained negative year-over-year for the 21st consecutive month and hit its lowest level since July 2022.
- As workforce composition continues to evolve considering recent hurricanes, Tampa (4.56%) topped the metro rankings for hourly earnings growth for the second month in a row.
What 2025 will bring remains to be seen.