Micro-Businesses Lead Hiring for a Second Straight Month as Wages Climb Fastest in the West

SAN FRANCISCO, Sept. 29, 2026 /PRNewswire/ — America’s small businesses added an estimated 28,000 net new jobs in September on a seasonally adjusted basis, according to the latest Gusto Small Business Jobs and Pay Report — the eighth consecutive month of positive hiring following January’s dip. September’s gain picked up from August, which was revised down to 18,500 net new jobs (from an initial estimate of 29,500), though the pace remained below the 12-month average of 34,000 as hiring continued at a cooler pace than earlier in the year.

Hiring stayed broad even as growth cooled: 14 of 19 sectors, all four U.S. regions, and every company size tier added jobs in September. Health Care and Social Assistance led all sectors for an eighth straight month with 13,000 net hires, followed by Other Services (+3,400) and Construction (+2,500). On the pay side, Average Hourly Earnings across small business employees rose 4.0% year-over-year to $37.40, while starting pay for newly hired workers climbed 3.1% to $25.80 an hour.

“Hiring picked up a little in September, but the bigger story is who’s doing the hiring,” said Nich Tremper, Senior Economist at Gusto. “For the second month running, it’s the smallest employers — companies with just five to nine employees — adding more jobs than any other size tier. At the same time, pay keeps climbing faster than inflation, especially out West. Small business owners aren’t chasing growth the way they were earlier this year, but they’re not pulling back either — they’re being selective about who they hire and paying up to keep them.”

The Big Picture

At +28,000, September’s seasonally adjusted net hires came in below the 12-month average of +34,000, though they picked up from August. Recent months: May (+38,000), June (+36,000), July (+39,700), August (+18,500). Prior months were revised with this release — July was revised down to +39,700 (from +42,400), and August was revised down to +18,500 (from +29,500). As always, the most recent months are subject to revision as additional payroll data arrives.

On pay, Average Hourly Earnings reached $37.40 in September, up 4.0% from a year earlier — wage growth has hovered around 4% for most of 2026, ranging from about 3.9% to 4.6%. The New Hire Pay Index, which tracks starting pay for newly hired workers, rose 3.1% year-over-year to about $25.80 an hour.

Sector Breakdown

Health Care and Social Assistance led all sectors for an eighth straight month. Top gainers:

• Health Care and Social Assistance: +13,000 net hires
• Other Services: +3,400 net hires
• Construction: +2,500 net hires

Fourteen of 19 sectors were in positive territory in September — a narrower spread than earlier in the year, but still a majority of the small business economy adding jobs.

Regional Breakdown

All four U.S. regions posted positive net hires in September:

• South: +13,000 net hires
• West: +7,500 net hires
• Midwest: +4,300 net hires
• Northeast: +3,000 net hires

The South held its position atop all regions again in September, up from +9,300 in August. The West came in second, followed by the Midwest and the Northeast. Wage growth was strongest in the West, where small business pay rose 5.3% year-over-year to $42.00 an hour — the highest wage growth and the highest pay of any U.S. region. The Northeast and the South grew at roughly the national rate of 4.0%, while the Midwest trailed at 3.0% growth and had the lowest average hourly earnings of the four regions at $32.91.

Company Size Breakdown

All four company size tiers posted positive net hires in September:

• 5–9 employees: +13,000 net hires
• 20–49 employees: +6,000 net hires
• 10–19 employees: +5,200 net hires
• 1–4 employees: +3,600 net hires

Micro-businesses with 5–9 employees led all size tiers for a second straight month, outpacing the 20–49 and 10–19 employee tiers combined. All four tiers stayed positive, a sign that hiring, while cooler than earlier in the year, remains broadly distributed across the small business economy.

Methodology

The Gusto Small Business Jobs and Pay Report tracks anonymized payroll data from a stratified random sample of roughly 100,000 small businesses across the United States with 1–49 employees, drawn from the 500,000+ companies on Gusto. To ensure the findings represent small businesses nationally, Gusto uses a two-stage weighting process: first, matching the national distribution of small businesses by industry, size, and region using U.S. Bureau of Labor Statistics Quarterly Census of Employment and Wages data as a benchmark; second, adjusting for company age using Census Bureau Business Dynamics Statistics data. All figures are seasonally adjusted using the U.S. Census Bureau’s X-13ARIMA-SEATS methodology unless otherwise noted. The report also tracks two small business pay measures — Average Hourly Earnings and the New Hire Pay Index, a three-month rolling average of starting pay for newly hired workers — both of which are seasonally adjusted.

About Gusto

Gusto is the leading partner for small businesses, helping them with a wide variety of critical tasks, including payroll, health benefits, tax credits, compliance, 401(k), HR, and much more. Gusto serves over 500,000 small businesses across the US and is on a multi-decade journey to grow the small business economy with technology and heart.

Media Contact:
press@gusto.com

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SOURCE Gusto, Inc.