The Paychex Small Business Jobs Index held near flat at 99.30 in January 2026 (+0.04 pts MoM; +0.03 pts QoQ; -0.38 pts YoY), showing little change in hiring momentum.

• The Midwest remained the top region for the 20th consecutive month, rising +0.20 pts MoM to 99.85, keeping it the strongest regional reading in the release.

• The South posted the largest monthly improvement among regions, increasing +0.53 pts MoM to 99.56, a sharper pickup than other regions in January.

• The West slipped to 98.55 and has been below 99 for six straight months and below 100 for 22 straight months, extending a prolonged period of below-baseline readings.

• Missouri moved to the top of the state rankings, jumping +1.92 pts MoM to 101.58, its highest rank and index level since January 2024.

• Tennessee increased +3.10 pts over the past three months to 100.78, ranking second behind Missouri (101.58) and showing one of the strongest recent state-level gains.

• West Coast states California (98.27) and Washington (98.69) started 2026 below 99 and were cited as the weakest among states, while Florida fell to 98.79, its lowest reading since March 2021.

• Education and Health Services led sectors for the 20th consecutive month at 100.57 and has reported growth for nearly five straight years, while Financial Activities rose to 100.11 (in line with its 2025 average of 100.12) and Manufacturing remained last among industries at 98.29, below 100 for a third consecutive January.

Hourly earnings growth was 2.68% YoY in January and was described as essentially unchanged since summer 2025, remaining below 3% since November 2024 for 15 consecutive months.

• Weekly earnings growth slowed to 2.53% YoY in January, while 1-month annualized weekly earnings growth has been below 2% for the past three months, pointing to weaker short-term momentum in weekly pay.

• Weekly hours worked growth slipped to -0.09% YoY in January, a slight downgrade that aligns with softer labor utilization in the month.

• The Midwest led regions again at 3.08% YoY hourly earnings growth and has increased for six consecutive months, extending its top ranking among regions since August 2025.

• The South remained the weakest region for hourly earnings growth at 2.45% YoY for an eighth straight month, but it was the only region with positive weekly hours worked growth in January at 0.19% YoY and has been positive for six straight months.

• Indiana led states in both hourly earnings growth (4.41% YoY) and weekly earnings growth (4.72% YoY) to start 2026, standing out relative to the broader low-to-mid 2% national pace.

• Virginia’s hourly earnings growth decelerated to 1.42% YoY, with 3-month annualized growth below 1% for a seventh straight month, while Maryland remained among the bottom performers with hourly earnings growth at 1.89% YoY and weekly earnings growth at 1.80% YoY and has ranked among the bottom three states on both measures since March 2024.

• Construction posted the strongest sector hourly earnings growth at 3.28% YoY, slightly above its 2025 average (3.14%) and after rebounding from sub-3% readings in September and October, while Education and Health Services was lowest at 2.31% YoY and has been below 3% for the past two years.

• Leisure and Hospitality rose to 2.55% YoY, its highest since January last year (2.74%), and Manufacturing continued to rank among the top three sectors for hourly earnings, weekly earnings, and weekly hours worked growth, consistent with its pattern through 2025.