Small Businesses Add 119,400 Jobs: March 2026 Gusto Small Business Jobs Report

Hiring among America’s small businesses maintained strong momentum in March, adding +119,400 net new jobs for the month – well above the 12-month average of 56,800 jobs, and building on February’s gain of +92,400 net hires. The March gain also marks a substantial year-over-year improvement from March 2025’s +49,900 net hires, reinforcing the positive trajectory for small business hiring heading deeper into 2026.

Below the surface, March’s picture was remarkably broad-based. Healthcare once again posted the strongest gains (+24,200 jobs), followed by accommodation and food services (+17,400) and retail trade (+12,800). Notably, professional services continued to build on February’s rebound with another solid month (+9,700 jobs). All four U.S. regions and all company size tiers posted net job gains in March – marking the second consecutive month of broad-based strength across the board.

The overall picture suggests small business hiring has found a firmer footing in early 2026. Back-to-back months of strong, broad-based gains – following January’s soft reading – point to a labor market that is gaining traction rather than merely bouncing around. That said, the very smallest businesses continue to lag larger small businesses in net hiring over the trailing year, a fault line that remains worth watching.

The Big Picture: March Hiring Holds Strong

Gusto data show that in March there were an estimated +119,400 net hires among small businesses nationally on a seasonally adjusted basis - the strongest monthly hiring pace since 2022.. This builds on February’s +92,400 net hires, and is well above the pace from last March of +49,900 net hires, revealing continued acceleration in America’s small business hiring.Here’s how March 2026 small-business net hiring compares to recent months:

• November 2025: +500 net hires

• December 2025: +77,100 net hires

• January 2026: -43,900 net hires

• February 2026: +92,400 net hires

U.S. small businesses hired 2.74 million workers in March, while terminations (employee separations for any reason) reached 2.56 million, resulting in solid net job growth nationally. The 12-month average now stands at +56,800 net hires per month for the nation overall (April 2025 to March 2026).

Notably, the overall pace of both hiring and terminations has picked up compared to a year ago. Hirings by small businesses were up +15.2% from one year ago in March, and separations were up +12.7%. This continues a trend that has emerged in recent months, and marks a meaningful shift from the pattern we observed through much of 2024 and early 2025, when we repeatedly described a “Great Freeze” in the labor market – with both hirings and separations running well below prior-year levels. The sustained year-over-year increases in both measures suggest the thaw is underway, with workers and employers showing greater willingness to make moves.

Broad Sector Gains Led by Healthcare and Hospitality

The March small business hiring picture was remarkably broad-based across sectors. Healthcare and consumer-facing industries posted strong gains, and professional services built on February’s rebound:

• Health Care and Social Assistance: +24,200 net hires

• Accommodation and Food Services: +17,400 net hires

• Retail Trade: +12,800 net hires

• Other Services: +11,900 net hires

• Professional, Scientific, and Technical Services: +9,700 net hires

• Transportation & Warehousing: +8,700 net hires

• Construction: +8,400 net hires

• Administrative and Support Services: +7,500 net hires

As in previous months, healthcare remains the standout performer among America’s small businesses. The continued strength in professional services – posting +9,700 in March on top of February’s +7,500 – is encouraging, suggesting the white-collar rebound is gaining traction rather than fading.

Only one sector posted job losses in March:

• Management of Companies: -200 net hires

The breadth of March’s gains – with 18 out of 19 sectors posting positive net hires is even stronger than February’s already solid 17-of-19 sectors showing positive growth.

Regions: All Four Post Gains, South Leads Again

March’s regional numbers continued the broad strength seen in February – all four U.S. regions posted positive net hires, with the South leading the way:

• South: +41,400 net hires

• Northeast: +30,600 net hires

• Midwest: +24,600 net hires

• West: +22,800 net hires

The continued breadth of regional gains is a positive signal. This marks the second straight month with all four regions in positive territory, a meaningful improvement from the uneven pattern seen in late 2025 and early January. The Northeast posted a particularly strong showing at +30,600, well above its typical pace and suggesting that the weather-related softness earlier in the year has fully unwound.

Company Size: Strong Gains Across All Tiers

Breaking down the numbers by company size reveals another encouraging month – all four size tiers posted positive net hires for the second straight month:

• 20–49 employees: +47,900 net hires

• 5–9 employees: +31,200 net hires

• 10–19 employees: +29,600 net hires

• 1–4 employees: +10,700 net hires

This broad recovery across all size tiers continues the pattern established in February. Notably, the smallest businesses (1–4 employees) posted +10,700 net hires in March – a solid reading that builds on February’s +8,500. The 5–9 employee tier was particularly strong at +31,200, its best showing in several months.

Over the past 12 months, businesses with 20–49 employees have averaged +22,600 net hires monthly, followed by those with 10–19 employees at +17,500 and 5–9 employees at +16,000. The smallest companies averaged just +700 per month, underscoring that while recent months have brought welcome gains for microenterprises, the longer-term gap between the smallest and largest small businesses remains a concern.

Takeaways for Small Businesses

March’s strong and broad-based hiring numbers – +119,400 net hires, with all four regions and all company sizes posting gains – mark the second consecutive month of encouraging results for small businesses. The year-over-year improvement of nearly +70,000 net hires compared to March 2025’s +49,900 underscores a meaningful strengthening in small business hiring conditions.

Perhaps most notably, the “Great Freeze” in hiring and separations appears to be thawing. The overall pace of both hirings and terminations has now been running above year-ago levels for several months, suggesting that workers and employers alike are becoming more willing to make moves. If this trend continues, it could signal a healthier, more dynamic labor market for small businesses in the months ahead.

Looking ahead, the back-to-back strength in February and March provides a more solid foundation than the choppy pattern seen in late 2025. The breadth of gains across sectors (18 of 19 positive), regions, and company sizes all point to a small business labor market that is on firmer ground heading into spring 2026.

Methodology

The Gusto Small Business Jobs 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 400,000+ companies on Gusto. All figures in this report are seasonally adjusted unless otherwise noted.

To ensure the findings represent small businesses across the United States, Gusto uses a two-stage weighting process. First, we randomly select a representative sample of companies (roughly 100,000 businesses annually) that match the national distribution of small businesses by industry, company size, and geographic region, using U.S. Bureau of Labor Statistics “Quarterly Census of Employment and Wages” data as a benchmark. Second, we adjust the sample to reflect the national distribution of company ages based on data from the Census Bureau’s “Business Dynamics Statistics.”

This report provides three key metrics for small businesses each month: Hires (new employees starting work), terminations (employees leaving for any reason), and net hires (the difference between hires and terminations, showing whether small businesses are creating or losing jobs overall). All data are seasonally adjusted using the U.S. Census Bureau’s X-13ARIMA-SEATS methodology.