Gusto Small Business Jobs Report Shows Hiring Surges to Fastest Pace Since 2022

Broad-Based Gains Across Sectors Signal the "Great Freeze" Is Thawing

SAN FRANCISCO, March 31, 2026 /PRNewswire/ -- America's small businesses are hiring again ? and in a big way. Gusto's March 2026 Small Business Jobs Report shows small businesses added a net 119,400 jobs last month, the strongest monthly hiring pace since 2022. The gains were broad-based, spanning every sector, region, and company size tier ? a signal that the labor market freeze of the past two years may finally be breaking.

The March figure is more than double the 12-month average of 56,800 net hires per month, and nearly 70,000 more than March 2025's 49,900 ? a meaningful year-over-year acceleration that builds on February's already-strong 92,400 net hires.

For much of 2024 and early 2025, Gusto data showed a labor market stuck in what has been referred to as the "Great Freeze" ? a period when both hirings and separations ran well below prior-year levels, signaling that workers and employers alike were reluctant to make moves. That dynamic has now reversed. In March, hirings rose 15.2% year-over-year and separations rose 12.7% ? the kind of two-sided momentum that signals a healthier, more dynamic labor market is taking hold.

"After nearly two years of the Great Freeze ? when both workers and employers were reluctant to make moves ? we're finally seeing the thaw," said Aaron Terrazas, an economist at Gusto. "Two back-to-back months of broad-based gains, across every region and every size tier, suggests small businesses have found firmer footing ? not just a one-month bounce."

Hiring Led by Healthcare and Hospitality, With Professional Services Accelerating

Hiring gains in March were led by healthcare (+24,200) and hospitality (+17,400), while professional services continued to accelerate ? posting +9,700 net hires on top of February's +7,500, suggesting the white-collar rebound is gaining real traction rather than fading. All told, 18 of 19 tracked sectors posted net job gains ? up from February's already-strong 17-of-19.

Healthcare's strength reflects familiar structural tailwinds: an aging population, persistent workforce shortages, and long-term demand for chronic and home-based care. Hospitality's gains align with the seasonal spring ramp-up as consumer dining activity rebounds after winter. Perhaps most telling is professional services ? after a prolonged white-collar slump through much of 2024 and 2025, small businesses in industries such as legal, accounting, and consulting appear to be gaining the confidence to grow their teams again.

Full sector breakdown:

• 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

Only one sector posted a net loss: Management of Companies (-200 net hires).

All Four Regions Positive for Second Consecutive Month, South Leads

All four U.S. regions posted net gains in March, led by the South (+41,400) ? which has consistently outpaced other regions in small business hiring momentum ? and a strong Northeast showing (+30,600) that suggests possible weather-related softness earlier in the year has fully unwound:

• South: +41,400 net hires
• Northeast: +30,600 net hires
• Midwest: +24,600 net hires
• West: +22,800 net hires

This marks the second consecutive month with all four regions in positive territory ? a meaningful improvement from the uneven pattern seen in late 2025.

All Company Size Tiers Post Gains; Gap for Smallest Firms Persists

All four business 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

While encouraging across the board, the trailing 12-month data underscore a persistent fault line: companies with 20?49 employees have averaged 22,600 monthly net hires over the past year, compared to just 700 per month for micro-businesses with 1?4 employees ? a gap that warrants continued attention even as the overall picture brightens.

Looking Ahead

The question now is whether this pace can sustain through the rest of 2026 amid broader economic uncertainty. The breadth of March's gains ? 18 of 19 sectors, all four regions, and every size tier positive ? provides a more solid foundation than the choppy pattern of late 2025. But the smallest businesses still lag. If the momentum holds and filters further down to micro-businesses, it could mark a genuine turning point for small business hiring.

About the Gusto Small Business Jobs Report

The Gusto Small Business Jobs Report provides a real-time view of hiring among the 400,000+ U.S. small businesses on Gusto. The report tracks anonymized payroll data from a stratified random sample of approximately 100,000 small businesses with 1?49 employees across the United States. All figures are seasonally adjusted using the U.S. Census Bureau's X-13ARIMA-SEATS methodology and are statistically weighted to be nationally representative by size, industry, region, and company age, using U.S. Bureau of Labor Statistics Quarterly Census of Employment and Wages data and Census Bureau Business Dynamics Statistics as benchmarks.

About Gusto
Gusto is a leading provider of cloud-based payroll, benefits, and HR solutions for small and medium-sized businesses. Gusto serves over 400,000 businesses nationwide. Each year Gusto processes tens of billions of dollars of payroll and provides employee benefits?like health insurance and 401(k) accounts?while helping companies create incredible workplaces. Through one refreshingly easy, integrated platform, Gusto automates and simplifies payroll, benefits, and HR, all while providing expert support.

Contact: Abby Vandenberg, abby.vandenberg@gusto.com?

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SOURCE Gusto, Inc.