The Small Business Economy Explained - from the Gusto Insights Group

If the small-business economy had a theme in 2025, it was  resilience in the face of mixed signals . The nation’s economy is growing strongly today, following a stumble last year. Hiring has stayed positive overall, despite growing at a slower pace than in recent years. Consumers kept opening their wallets even as they told pollsters they were worried. And the Federal Reserve finally began to deli...

The latest data on small-business hiring from Gusto shows that AI isn’t the “jobs apocalypse” for small companies that some have feared. Our evidence suggests that small businesses with more AI-exposed workforces are seeing revenue and hiring gains – not the dramatic job losses that some have predicted. There’s a learning curve, but early evidence points toward growth, not decline. In this episode...

Much of the conversation around artificial intelligence focuses on job displacement – the fear that AI might automate away millions of jobs. But this narrative overlooks a practical and less-discussed impact that AI will have on jobs: the massive physical infrastructure required to power AI is creating surging demand for skilled trade workers around America. In this research, we examine how pay fo...

Starting in 2026, workers earning tips or overtime may see slightly bigger paychecks under  new federal tax deductions  created by the One Big Beautiful Bill Act (OBBBA). How much will paychecks actually change for the typical small business worker from these new deductions? In this episode we walk through new research from the Gusto Insights Group breaking down the numbers for small businesses an...

Hiring among America’s small businesses posted solid gains in January, adding +37,100 net new jobs for the month – slightly below the 12-month average of 52,400 jobs, but marking continued improvement from the October-November soft patch and a sharp year-over-year gain from January 2025’s -12,100 net job loss. In this episode, we break down the latest Gusto Small Business Jobs Report for January 2...

Gusto’s analysis finds that small business owners typically earn about 40% more than their employees, reflecting their dual roles as workers, managers, and primary risk-bearers. Owner pay rose sharply during the post-pandemic recovery but has largely stalled since 2023, as inflation, tighter credit, and shifting demand increased pressure on small firms. The data shows that industry—not firm size—d...

Gusto’s analysis reveals that missed payrolls among U.S. small businesses surged by over 50% between 2019 and 2025, a trend largely driven by inflation, high interest rates, and thin cash reserves. While these failures typically stem from temporary liquidity gaps rather than terminal business failure, they act as a "breaking point" that triggers lasting employment declines. Data shows that affecte...

To close out 2025, many small businesses did something they hadn’t been able to do as confidently in recent years: share their success with employees. New data from Gusto shows that year-end bonuses rose sharply in both size and reach, with average bonuses jumping more than 11 percent and a growing share of workers receiving a payout. These gains were broad-based across industries, from tourism an...

The  Gusto Small Business Jobs Report  for December 2025 highlights a significant  recovery in hiring  among American small businesses with fewer than 50 employees. After a period of stagnation, small businesses added approximately  47,900 net new jobs , signaling a return to  stable economic conditions  as the new year approaches. In this episode we walk through the latest December numbers on sma...

As we look forward to 2026, our economists took stock of the top small-business stories we saw unfold this year, and gathered them into 5 key trends we believe will help reshape the nation’s small-business economy in the coming year. Here are the 5 big trends we expect to shape the small-business economy in 2026 and beyond. Full analysis here: https://gusto.com/resources/gusto-insights/2026-smb-pr...

Here's the latest breakdown on the numbers for America's small-business economy for November 2025 from the  Gusto Small Business Jobs Report  -- a real-time view of hiring among the 400,000+ U.S. small businesses on Gusto. The TL;DR: Hiring among America’s small businesses was essentially flat in November, posting a modest -2,000 net job loss for the month — a sharp rebound from October’s...

Gen Z’s white-collar careers are running into a bottleneck: hiring for 20- to 28-year-olds continued to remain flat this year, leaving young professionals competing for a limited number of openings. With each new class of graduates entering a market that isn’t expanding, early-career workers are finding it harder to land roles that match their skills, or to move up once they’re in the door. In thi...

An affordable and secure retirement is part of the dream of many U.S. workers. However, nearly 56 million U.S. workers lack access to an employer-sponsored savings plan. To expand access, Congress created the Small Employer Pension Program -- a federal tax credit that helps small businesses start a retirement plan. But uptake has been low. What happens when we show personalized tax credit savings...

Small businesses in America today face a paradox. On paper, the economy looks strong: GDP is growing at nearly 4%, consumer spending is healthy, and inflation is moderating. Yet business owners are seeing something different on the ground – weakening demand, falling consumer confidence, and a labor market that has cooled dramatically from its red-hot pace of recent years.

Are small businesses hiring AI-focused roles today? Most discussion of AI and hiring focuses on large, enterprise-scale companies. However, we found a small but growing share of small businesses on Gusto are hiring for AI roles – and that the pace has accelerated rapidly in the past two years.  In this analysis, we look at the share of employees on small business payrolls with “AI” job titles. And...

In this episode of "The Insights Brief" from Gusto, we summarize the key takeaways from our recent research, "Beyond the Books: How Accountants Can Help Small Businesses Thrive." Download the full study at: https://gusto.com/resources/gusto-insights/beyond-the-books

America’s healthcare system is mostly based on employer-provided health insurance. Because roughly 46% of Americans work at small businesses, the ability of small companies to affordably offer health benefits to their employees is a critical national priority.  Based on our analysis of real-time payroll and benefits data from Gusto, we find that since 2022 the cost of offering health insurance has...

Accountants have long been trusted partners to small businesses, but that partnership is changing. Today’s clients want more than bookkeeping support or tax preparation. They’re looking for guidance on compensation, growth, and how to navigate uncertainty. This report draws on survey responses from more than 1,200 small business leaders who currently work with an accountant. It highlights how clie...

Summary of our annual State of Small Business 2025 report. Drawing on responses from a nationally representative survey of 1,148 small businesses, we reveal what America’s small business owners think about the state of the economy, their views on tariffs and interest rates, and their expectations for hiring and business performance in the coming year.

October 2025 marks the inaugural release of the Gusto Small Business Jobs Report – a real-time view of hiring among the 400,000+ U.S. small businesses on Gusto. This podcast breaks down the state of hiring among U.S. small businesses, as seen in anonymized Gusto payroll data.