The Paychex Small Business Jobs Index rose +0.49 pts MoM to 99.83 in June 2026 and +0.18 pts YoY, reaching its highest level since August 2025 and signaling improving small business hiring momentum.

• The national index increased to 99.83 (+0.49 pts MoM), marking the strongest level since August 2025 and indicating continued acceleration in employment growth.
• On a YoY basis, the index rose +0.18 pts, representing the first positive annual change since March 2022 and suggesting a shift toward stronger hiring compared with last year.
• Small business employment growth has now increased for four consecutive months, the first such streak since November 2020, pointing to sustained near-term improvement in hiring momentum.
• The Midwest remained the top-performing region at 100.24, extending its lead to 25 consecutive months and indicating persistent regional strength.
• The West rose sharply by +1.22 pts MoM to 100.00, with both Pacific and Mountain divisions gaining more than one point, highlighting a notable regional rebound.
• At the state level, Indiana led with an index of 101.46, reclaiming the top position and posting the strongest three-month gain (+3.15 pts), while California moved above 100 (100.01) for the first time since March 2024.
• Seventeen of 20 states increased their pace of job growth over the past quarter, indicating broad-based improvement across regions.
• By sector, Education and Health Services remained the strongest at 100.68, while Leisure and Hospitality rose +1.68 pts to 99.55 (a two-year high), leading sector gains over the past quarter and signaling recovery in previously weaker industries.

Hourly earnings growth rose to +2.80% YoY in June while weekly earnings growth slowed to +2.80% YoY and weekly hours worked increased +0.14% YoY, indicating modest wage gains alongside continued improvement in labor utilization.

• Hourly earnings growth ticked up to +2.80% YoY, with one-month annualized growth accelerating to +3.23%, though YoY growth has remained below 3% for 20 consecutive months, indicating persistently moderate wage pressure.
• Weekly earnings growth moderated to +2.80% YoY, with one-month annualized growth slowing to +2.39%, suggesting a slight easing in overall earnings momentum despite steady wage gains.
• Weekly hours worked increased +0.14% YoY, marking the fourth consecutive monthly gain, indicating a sustained improvement in labor utilization among small businesses.
• Regionally, the Northeast led in hourly earnings growth (+2.98%) and weekly earnings growth (+2.88%), while all regions recorded one-month annualized hourly earnings growth above 3%, pointing to broadly stronger short-term wage momentum.
• The South remained the weakest region for hourly earnings growth at +2.64% for the 13th consecutive month, though it led weekly hours worked growth at +0.28%, reflecting divergence between wage growth and labor utilization.
• At the state level, Indiana led with +4.34% hourly earnings growth and +4.09% weekly earnings growth, remaining the only state above 4%, while all states recorded hourly earnings growth above 2%, indicating a relatively tight distribution.
• Pennsylvania ranked near the bottom across multiple measures, with +2.25% hourly earnings growth, +1.94% weekly earnings growth, and -0.29% weekly hours worked growth, highlighting localized weakness.
• By sector, Manufacturing led hourly earnings growth at +3.09% and has averaged just above 3% over recent years, while Construction led weekly earnings growth (+3.47%) and hours worked (+0.53%), indicating strong labor demand in these sectors.
• Education and Health Services remained the weakest sector, with +2.16% hourly earnings growth, +2.00% weekly earnings growth, and a long-standing trend of negative weekly hours worked growth, pointing to persistent underperformance.