Recruitment has rebounded for the second consecutive month and is higher than the 12-month average level.
San Francisco, November 3, 2026 / PRNewswire / -- According to the latest Small Business Employment and Wages report released by Gusto, small businesses in the United States added an estimated 38,000 net new jobs in October after seasonal adjustments, marking the ninth consecutive month of positive job growth in hiring. Hiring has rebounded for the second consecutive month and is higher than the average of 34,000 new jobs per month over the past 12 months. The data for October improved compared to September, which saw its figure revised down to a net addition of 27,000 jobs, lower than the initial estimate of 28,000.
Employment growth is widespread across various industries, regions, and company sizes: 16 out of 19 industries saw new job creations in October, with all four major regions of the United States experiencing positive growth. All company size segments also added positions. The healthcare and social assistance sector once again led the way, with a net addition of 13,000 jobs, followed by professional, scientific, and technical services (+5,500) and construction (+3,800). The average hourly wage for employees in small businesses increased by 3.9% year-on-year to $37.50; the starting salary for newly hired employees rose by 3.0% to about $25.90 per hour.
Gusto Senior economist Nich Tremper stated: "The growth rate in October accelerated, but it has not yet fully returned to the pace we saw in the spring. Recruitment has rebounded for the second consecutive month and is above the 12-month average. We see growth across all enterprise sizes and in 16 out of 19 industries, and salaries have continued to rise, with the average hourly wage increasing by 3.9% compared to a year ago."
Overall situation
In October, there was a net addition of 38,000 jobs, which is higher than the average of 34,000 over the past 12 months and represents the largest increase since July, as the performance in the preceding months has been relatively weak. The recent figures are as follows: June (+36,000), July (+40,000), August (+25,000), September (+27,000). In this release, Gusto has revised the data for the previous months: September's figure has been lowered from +28,000 to +27,000, and August's figure has been raised from +18,500 to +25,000. The report states that, as usual, as more payroll data becomes available, the figures for the recent months may continue to be revised.
In terms of salaries, the average hourly wage (i.e., the overall average wage of employees in small businesses) reached $37.50 in October, an increase of 3.9% compared to the same period last year, with little change from the 4.0% year-on-year increase in September. 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 3.0% year-on-year to approximately $25.90 per hour.
Industry Sub-items
The healthcare and social assistance industries led all sectors for the ninth consecutive month. Industries with significant growth included:
- Healthcare and Social Assistance: A net addition of 13,000 jobs
- Professional, scientific, and technical services: A net increase of 5,500 new jobs
- Construction industry: A net addition of 3,800 jobs
- Other services: A net increase of 2,600 positions
In October, 16 out of 19 industries were in a period of positive growth. Only 3 industries experienced a reduction in jobs, with each industry seeing less than 300 job cuts, namely the mining sector, the accommodation and catering services industry, and the corporate management industry.
Regional breakdown
Four major regions in the United States all achieved net new employment in October:
- South: A net increase of 13,000 jobs
- Midwest: A net addition of 9,400 jobs
- Northeast: A net addition of 8,200 jobs
- West: A net increase of 7,000 new jobs
For the ninth consecutive month, the South leads the way. In terms of salaries, the West has the highest growth rate, with a year-on-year increase of 5.0%, and an average hourly wage of $42.00, which is the highest among all regions. The South's salary growth rate is about 3.9%, which is roughly in line with the national average; the Northeast has a slightly lower rate of 3.8%. The Central and Western regions have the lowest growth rate at 3.2%, and their average hourly wage of $33.00 is also the lowest among the four regions.
Company Size Breakdown
In October, all four companies achieved net new employment across all levels of company size:
- 20 to 49 employees: A net addition of 15,000 jobs
- 5 to 9 employees: A net increase of 12,000 new positions
- 10 to 19 employees: A net addition of 7,900 positions
- 1 to 4 employees: A net increase of 3,600 positions
Enterprises with 20 to 49 employees saw the highest growth, regaining the lead after being surpassed by those with 5 to 9 employees in August and September. The report indicates that all four size segments once again maintained positive growth, demonstrating that recruitment activities are still widely distributed across the small business sector.
Methodology
The Gusto Small Business Employment and Wages Report tracks anonymous payroll data from approximately 100,000 small businesses in the United States with 1 to 49 employees each. These businesses are part of a stratified random sample of over 500,000 companies on the Gusto platform. To ensure that the results represent small businesses across the U.S., Gusto employs a two-stage weighting method: first, it matches the national distribution of small businesses by industry, size, and region using data from the U.S. Bureau of Labor Statistics' Quarterly Employment and Wages Census; second, it adjusts for the age of the businesses using statistical data on business dynamics from the U.S. Census Bureau. Unless otherwise indicated, 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 wages: average hourly wage, as well as the new hire wage index (which is a three-month rolling average of the starting salaries of newly hired employees), both of which are also seasonally adjusted.
About Gusto
Gusto indicates that the company is an important partner for small businesses, assisting them with various critical tasks such as payroll processing, health benefits, tax deductions, compliance, 401(k) plans, and human resources management. Gusto serves over 500,000 small businesses across the United States and is committed to promoting the long-term economic growth of small businesses through technology and services.
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