Jobs down, revenue up: Inside Q1-2026 small business trends

Small business employment in the US decreased by 59,100 jobs in Q1-2026—a quarterly decline of 0.47%, and the fourth consecutive quarter of declining employment, marking a full year of losses.

But the revenue picture tells a different story. Average quarterly revenue increased by $2,040 (in 2017 dollars), a 1.33% quarterly growth rate and the second consecutive quarter of gains. That employment-revenue split—jobs down, revenue up—runs as a consistent thread through the sector, regional, and state-level data below.

Quarterly trends by sector

All 12 sectors tracked by the Index posted small business employment declines in Q1-2026. Quarterly decline rates ranged from just -0.40% to -0.54%—a notably narrow band across all sectors tracked. Education and health services (NAICS 61-62) absorbed the largest absolute loss, shedding 12,400 jobs. Professional and business services (NAICS 54-56) wasn't far behind at -10,600 jobs. Given that these are two of the largest sectors by employment, their declines carry significant weight in the overall number.

On the revenue side, five of 12 sectors grew. Construction (NAICS 23) led them all, with the largest average gain ($8,530) and fastest growth rate (5.72%) of any sector. Professional and business services (NAICS 54-56) is worth a second look too: it shed the second-most jobs of any sector (-11,620) while posting the second-best revenue growth (5.22%).

See the table below for full sector details.

Quarterly trends by region

All eight US regions tracked by the Index saw small business employment fall in Q1-2026. The Southeast absorbed the biggest hit, with 14,600 fewer jobs (-0.46%).

Revenue was more resilient—six of eight regions grew. The Far West led the way, adding an average of $4,030 per business (2.38% growth). The Rocky Mountain region saw the steepest revenue decline of any region (-2.36%)—and was one of two areas, along with the Plains, where both employment and revenue fell.

See the table below for full regional details.

Quarterly trends by state

Every one of the 20 states tracked by the Index saw small business employment decline in Q1-2026. California had the largest drop (6,500 jobs, -0.44%); Florida had the fastest rate of decline (-0.54%, 4,500 jobs).

On revenue, 18 of 20 states grew. Ohio posted the fastest gains, adding an average of $7,730 per business—a 5.30% quarterly increase. The two exceptions: Georgia and Oregon, both of which saw modest revenue declines—the only states where employment and revenue fell together.

See the tables and charts below for full state-level details.