Gusto Small Business Jobs and Pay Report: Small Businesses Add 38,000 Jobs in October, Marking Ninth Straight Month of Growth

Hiring Picks Up for a Second Straight Month and Tops the 12-Month Average

SAN FRANCISCO, Nov. 3, 2026 /PRNewswire/ -- America's small businesses added an estimated 38,000 net new jobs in October on a seasonally adjusted basis, according to the latest Gusto Small Business Jobs and Pay Report, marking the ninth consecutive month of positive hiring. Hiring picked up for a second straight month and came in above the 12-month average of 34,000. October picked up from September, which was revised down to 27,000 net new jobs (from an initial estimate of 28,000).

Hiring was broad across sectors, regions, and business size: 16 of 19 sectors, all four U.S. regions, and every company size tier added jobs in October. Health Care and Social Assistance again led all sectors with 13,000 net hires, followed by Professional, Scientific, and Technical Services (+5,500) and Construction (+3,800). Average Hourly Earnings across small business employees rose 3.9% year-over-year to $37.50, while starting pay for newly hired workers climbed 3.0% to about $25.90 an hour.

"October was a step up in pace, but not quite a return to the pace we saw in spring," said Nich Tremper, Senior Economist at Gusto. "Hiring picked up for the second month in a row and came in above the 12-month average. We saw growth across all business sizes and in 16 of 19 sectors, and pay kept rising, with average hourly earnings up 3.9% from a year ago."

The Big Picture

At +38,000, October's net hires came in above the 12-month average of +34,000, the largest gain since July after a softer couple of months. Recent months: June (+36,000), July (+40,000), August (+25,000), September (+27,000). Prior months were revised with this release: September was revised down to +27,000 (from +28,000), and August was revised up to +25,000 (from +18,500). As always, the most recent months are subject to revision as additional payroll data arrives.

On pay, Average Hourly Earnings – the average wage across small business workers – reached $37.50 in October, up 3.9% from a year earlier and little changed from September's 4.0%. Wage growth has hovered around 4% for much of 2026, ranging from about 3.9% to 4.6%. The New Hire Pay Index – which tracks starting pay for newly hired workers – rose 3.0% year-over-year to about $25.90 an hour.

Sector Breakdown

Health Care and Social Assistance led all sectors for a ninth straight month. Top gainers:

• Health Care and Social Assistance: +13,000 net hires
• Professional, Scientific, and Technical Services: +5,500 net hires
• Construction: +3,800 net hires
• Other Services: +2,600 net hires

Sixteen of 19 sectors were in positive territory in October. Only three sectors shed jobs, and each by fewer than 300 – Mining, Accommodation and Food Services, and Management of Companies.

Regional Breakdown

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

• South: +13,000 net hires
• Midwest: +9,400 net hires
• Northeast: +8,200 net hires
• West: +7,000 net hires

The South led for the ninth straight month. On pay, the West led wage growth at 5.0% year over year and has the highest average hourly earnings of any region at $42.00. The South grew at about the national rate of 3.9%, with the Northeast just below at 3.8%. The Midwest trailed with 3.2% growth, and its average hourly earnings of $33.00 are the lowest of the four regions.

Company Size Breakdown

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

• 20-49 employees: +15,000 net hires
• 5-9 employees: +12,000 net hires
• 10-19 employees: +7,900 net hires
• 1-4 employees: +3,600 net hires

Businesses with 20-49 employees led, back on top after the 5-9 employee tier led in August and September. Once again, all four tiers stayed positive, a sign that hiring 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.

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SOURCE Gusto, Inc.