Why are small businesses hiring fewer people? It’s complicated

US small businesses employ almost half of private sector workers, but that number is decreasing due to various reasons

Small businesses are hiring fewer people. It's a worrying trend given that in the US small businesses employ nearly half (46.4%) of private sector employees.

The numbers speak for themselves. According to data from software maker Intuit, employment at US small businesses with one to nine employees decreased by 23,400 in February compared with January, with all of the 12 industrial sectors and regions tracked also reporting declines. The payroll provider Paychex says that once fast-growing sectors such as leisure and hospitality have also seen wage declines, with job growth in the western part of the country falling into negative territory for the first time since 2021.