Micro-enterprises lead recruitment for the second consecutive month, with the fastest wage increases in the western region
San Francisco, September 29, 2026 / PRNewswire / -- A newly released report on employment and salaries in small businesses by Gusto shows that small businesses in the United States added an estimated 28,000 net new jobs in September after seasonal adjustments. This is the eighth consecutive month of positive growth following a decline in January.
The number of new jobs created in September rebounded compared to August. The data for August was revised down to a net addition of 18,500 jobs, which is lower than the initial estimate of 29,500. However, the hiring pace in September was still below the average of 34,000 jobs per month over the past 12 months, indicating that hiring remains more modest compared to the beginning of the year.
Despite the slowdown in growth, recruitment remained widespread: 14 out of 19 industries, all four regions of the United States, and all company sizes saw an increase in jobs in September. The healthcare and social assistance industry led all sectors for the eighth consecutive month, with a net addition of 13,000 jobs, followed by other services with a net addition of 3,400 jobs, and then construction with a net addition of 2,500 jobs.
In terms of salary, the average hourly wage for employees in small businesses increased by 4.0% year-on-year to $37.40; the starting salary for newly hired employees rose by 3.1% year-on-year to $25.80 per hour.
Gusto Senior economist Nich Tremper stated: "Recruitment saw a slight rebound in September, but what's more noteworthy is who is doing the hiring. For the second consecutive month, employers with the smallest scale—companies with only 5 to 9 employees—added the most new positions, exceeding any other size category. At the same time, wage increases continue to outpace inflation, especially in the western United States. Small business owners are not as focused on growth as they were earlier this year, but they are also not contracting; they are more selective in their hiring and willing to pay higher salaries to retain employees."
Overall situation
After seasonal adjustment, the net increase in jobs in September was 28,000, which is lower than the average of 34,000 over the past 12 months, but it has rebounded from August. Recent figures are as follows: 38,000 net new jobs in May, 36,000 in June, 39,700 in July, and 18,500 in August.
Gusto has revised the data for the previous months in this release: the July data has been revised down to a net increase of 39,700, which is lower than the previous figure of 42,400; the August data has been revised down to a net increase of 18,500, which is lower than the previous 29,500. The report states that, as usual, as more payroll data becomes available, the data for the recent months may continue to be revised.
In terms of salary, the average hourly wage in September reached $37.40, an increase of 4.0% compared to the same period last year. For most of 2026, the wage growth rate hovered around 4%, ranging from about 3.9% to 4.6%. The "New Hires Salary Index," which tracks the starting salaries of newly hired employees, increased by 3.1% year-on-year to approximately $25.80 per hour.
Industry Segmentation
The healthcare and social assistance industries have led all sectors for the eighth consecutive month. Industries with significant growth include:
- Healthcare and Social Assistance: A net addition of 13,000 jobs
- Other service industries: A net increase of 3,400 jobs
- Construction industry: A net addition of 2,500 jobs
Fourteen out of 19 industries achieved positive growth in September. Although the coverage has narrowed compared to the beginning of the year, most industries in the small business economy are still creating jobs.
Regional segmentation
All four major regions in the United States achieved net job gains in September:
- South: A net increase of 13,000 jobs
- West: A net increase of 7,500 jobs
- Midwest: A net addition of 4,300 jobs
- Northeast: A net addition of 3,000 jobs
In September, the southern region once again ranked first among all regions, with 9,300 more job positions than in August. The western region came in second, followed by the central and western regions, and then the northeastern region.
In terms of wage growth, the West is the strongest, with small businesses experiencing a year-on-year increase of 5.3% to an average hourly wage of $42.00, making it the region with the highest wage growth and also the highest wage levels in the United States. The Northeast and South have a growth rate roughly consistent with the national average of 4.0%; however, the Midwest lags behind with a growth rate of 3.0%, and an average hourly wage of $32.91, which is the lowest among the four regions.
Company Size Breakdown
All four companies achieved a net increase in positions in September across all four levels of company size:
- 5 to 9 employees: A net increase of 13,000 jobs
- 20 to 49 employees: A net addition of 6,000 positions
- 10 to 19 employees: A net addition of 5,200 positions
- 1 to 4 employees: A net increase of 3,600 positions
Micro-enterprises with 5 to 9 employees led all size categories for the second consecutive month, with the number of new jobs created exceeding the combined total of those in the two categories with 20 to 49 employees and 10 to 19 employees. All four size categories maintained positive growth, indicating that despite a cooling down in recruitment compared to the beginning of the year, recruitment in the small business economy is still widely distributed.
Methodology
The Gusto Small Business Employment and Salary Report tracks anonymous payroll data from approximately 100,000 small businesses in the United States with 1 to 49 employees each. These samples come from over 500,000 companies that use the Gusto service, and stratified random sampling is employed in the data collection process.
To ensure that the results represent small businesses across the United States, Gusto adopts a two-stage weighting method: First, data from the U.S. Bureau of Labor Statistics' Quarterly Census of Employment and Wages is used as a benchmark to match the distribution of small businesses nationwide by industry, size, and region; second, data on corporate dynamics from the U.S. Census Bureau is utilized to adjust for the age of the companies. Unless otherwise specified, all data is seasonally adjusted using the X-13ARIMA-SEATS method of the U.S. Census Bureau.
The report also tracks two indicators of small business salaries: average hourly wage, and the new hire salary index. The latter is a three-month rolling average of the starting salaries for newly hired employees, and both indicators are seasonally adjusted.
About Gusto
Gusto indicates that the company is an important partner for small businesses, assisting them with various critical matters such as payroll distribution, health benefits, tax deductions, compliance, 401(k) plans, and human resources. Gusto currently serves over 500,000 small businesses in the United States and is committed to promoting the long-term economic development of small businesses through technology and services.
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