Small Business Checkpoint

Small business hiring is catching up to overall job growth, although higher interest rates and quality of labor remain concerns.

Headshot of Anna Zhou

Anna Zhou

Headshot of Taylor Bowley

Taylor Bowley

October 2023

Key takeaways

  • Small business hiring remains healthy, with payroll spending per small business client growing year-over-year (YoY) across revenue tiers, according to Bank of America internal data. We find that overall job growth earlier this year has largely been supported by big enterprises, but in recent months small businesses have been catching up.
  • Small business payments to hiring firms, a leading indicator for payrolls, are gradually returning to 2019 levels. This is in line with the view that the labor market is normalizing to its trend growth.
  • Overall, small businesses continue to face crosscurrents. On the positive side, U.S. consumer spending has held up well, according to Bank of America internal data, which, in turn, points to healthy revenues for small businesses. However, higher interest rates and quality of labor have become more of a concern relative to a year ago.

Read our full analysis for a more in-depth look at these trends.

Small Business Checkpoint is a regular publication from Bank of America Institute. It aims to provide a real-time assessment of small business spending activities and financial well-being, leveraging the depth and breadth of Bank of America’s proprietary data. Such data is not intended to be reflective or indicative of, and should not be relied upon as, the results of operations, financial condition or performance of Bank of America.