US Small Business Employment | August 2026 Job Growth Data

Stability in Small Business Employment

United States small businesses maintained consistent employment levels throughout August 2026. Data from the Paychex Small Business Employment Watch shows the national jobs index remained steady at 99.13, a figure that aligns with the year-to-date average of 99.20. These businesses, defined as companies with fewer than 50 employees, are showing a pattern of sustained operation despite broader economic concerns.

Employers are increasingly relying on their current staff to address consumer demand. For the sixth month in a row, weekly hours worked grew by 0.07 percent. This represents the longest period of continuous growth in this metric since October 2020. It suggests that owners are choosing to extend existing labor hours rather than hiring new personnel, likely a response to a tight labor market environment.

Regional and Sector Performance Trends

The Midwest region emerged as a leader in job growth during August with a jobs index of 99.48. Meanwhile, the West region saw a notable increase, rising by 0.41 percentage points. Phoenix continued to dominate as the top metropolitan area, securing the number one ranking for job growth for the seventh time over the past year.

Industry performance also highlighted shifting priorities. The Education and Health Services sector regained the top spot for employment growth with a score of 99.88. This sector has held a position among the top two for job growth every month since February 2023, indicating a persistent need for staffing that is not mirrored across all other industries.

Wage Growth and Future Outlook

Hourly earnings growth remained modest, staying under three percent for the 24th consecutive month. In August, the rate sat at 2.89 percent. Weekly earnings growth, however, reached 3.00 percent, marking a consistent trend seen since February 2026. This data suggests that while wage growth has stabilized, employees are seeing slight gains in their total weekly pay as hours worked increase.

John Gibson, president and CEO of Paychex, noted that the data points toward business resilience. He observed that while larger companies might be experiencing different growth trajectories, the sub-50 employee segment is finding ways to manage labor needs effectively. As the broader economy heads into the final quarter of the year, the reliance on existing staff to meet operational targets remains a key indicator to monitor. Watch for changes in how businesses balance these wage pressures against the ongoing need to maintain production levels in an environment where hiring remains difficult.