The Paychex Small Business Jobs Index edged down -0.21 pts to 99.81 in May, indicating largely unchanged small business employment growth.

• The Midwest (100.19) remained the strongest region for the 12th straight month and the only one above 100.
• Texas (101.20) reclaimed the top spot among states, while California (99.36) remained below 100 for the 14th consecutive month despite modest gains.
• Education and Health Services (101.71) led all sectors for the 12th month, continuing four years of strong job growth.
• Construction dropped -0.68 pts to 99.69, its lowest reading since March 2021.
• Leisure and Hospitality remained the weakest sector for the fourth straight month at 98.18.

Hourly earnings growth for US small business workers slowed to 2.77% YoY in May, marking a new 4-year low and continuing a steady decline in wage growth.

• The 3-month annualized hourly earnings growth dropped to 2.45%, its lowest since Dec 2020, while weekly earnings growth rose to 2.59% YoY, extending a 4-month uptrend.
• Weekly hours worked remained negative YoY at -0.21%, with only 3 of the past 48 months showing growth.
• The Midwest led regions in hourly (3.06%) and weekly (2.79%) earnings growth; the Northeast ranked last in both categories.
• Tennessee (4.74%) topped states for hourly earnings for the 7th straight month, while North Carolina (1.44%) and Maryland (1.82%) were the weakest.
• Other Services (3.37%), Construction (3.25%), and Manufacturing (3.05%) led sectors in hourly earnings; Leisure and Hospitality fell to last at 2.11%, its lowest since July 2015.