Paychex Small Business Employment Watch: May 2026
Paychex Small Business Jobs Index Improves for a Third Consecutive Month
ROCHESTER, N.Y., June 02, 2026 (GLOBE NEWSWIRE) -- The Paychex Small Business Jobs Index – a primary component of the Paychex Small Business Employment Watch that measures the pace of job growth among U.S. small businesses with fewer than 50 employees – improved for the third consecutive month in May, a first since February 2023. The jobs index increased 0.18 percentage points in May to 99.34, marking its highest level so far in 2026. While hourly earnings growth remained steady at 2.73% in May, U.S. small business workers experienced continued growth in both weekly hours worked and earnings for the month.
“The small business job growth rate has increased three consecutive months, reinforcing the durability and underlying strength of the labor market on Main Street,” said John Gibson, Paychex president and CEO. “Most states and metros analyzed in our jobs index reported an increase in May, reflecting consistency across geographies as we head into the summer. We see a similar trends across our client base, as businesses with more than 50 employees continue to add workers at a solid pace.”
Jobs Index and Wage Data Highlights
- Weekly earnings growth (2.98%) increased for the fifth consecutive month in May to its highest level since January 2024 (3.08%).
- Weekly hours worked growth (0.12%) was positive for the third consecutive month in May. This is the first three-month positive streak since April 2021, when weekly hours worked increased for four consecutive months.
- Of the top 20 largest states analyzed, 14 recorded an increase in small business job growth in May. Tennessee gained 1.62 percentage points to a jobs index of 100.87, including a more than five-percentage-point gain in the Manufacturing and Construction sectors for the month.
- Small business job growth increased in 15 of the top 20 largest U.S. metros in May, including Phoenix (100.95) reclaiming its position as the top-ranked metro for the fifth time in the last eight months.
- Education and Health Services (100.37) continued to lead sectors for small business job growth in May, the position it has held in all but one month since 2024.
- Manufacturing (99.04) reported the strongest one-, three-, and 12-month increases in small business job growth among industries.
About the Paychex Small Business Employment Watch
Since 2014, the Paychex Small Business Employment Watch has been a trusted source of employment trends for U.S. small businesses with fewer than 50 employees. The Employment Watch website offers interactive charts and historical data across the report’s two key components – the jobs index and wage data – as well as the methodology for both analyses. Visit the Bloomberg Terminals or subscribe to receive monthly alerts with the latest data.
*Information regarding the professions included in the industry data can be found at the Bureau of Labor Statistics website.
About Paychex
Paychex, Inc. (Nasdaq: PAYX) is the digitally driven HR leader that is reimagining how companies address the needs of today’s workforce with the most comprehensive, flexible, and innovative HCM solutions for organizations of all sizes. Offering a full spectrum of HR advisory and employee solutions, Paychex pays 1 out of every 11 American private sector workers and is raising the bar in HCM for approximately 800,000 customers in the U.S. and Europe. Every member of the Paychex team is committed to fulfilling the company’s purpose of helping businesses succeed. Visit paychex.com to learn more.
Media Contacts
Tracy Volkmann
Paychex, Inc.
Manager, Public Relations
(585) 387-6705
tvolkmann@paychex.com
@Paychex
Erin McAward
ICR, Inc.
Account Director
paychexpr@icrinc.com
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