Jobs down, revenue down: Inside Q2-2026 small business trends

Small business employment in the US decreased by 32,400 jobs in Q2-2026—a quarterly decline of 0.25%, and the third consecutive quarter of declining employment.

This quarter, revenue moved in the same direction. Average quarterly revenue decreased by $2,920 (in 2017 dollars), a 1.94% quarterly decline that snapped a two-quarter streak of revenue gains.

Quarterly trends by sector

All 12 sectors tracked by the Index posted small business employment declines in Q2-2026. Quarterly decline rates ranged from -0.11% to -0.36%, a narrow band across all sectors tracked. Education and health services (NAICS 61-62) had the largest absolute loss, decreasing by 7,000 jobs. Leisure and hospitality (NAICS 71-72) had the fastest rate of decline (-0.36%), losing 6,000 jobs.

On the revenue side, only one sector grew: Utilities (NAICS 22), which had both the largest average gain ($9,300) and the fastest growth rate (3.45%) of any sector. Every other sector saw revenue fall. Agriculture, natural resources, and mining (NAICS 11; 21) had the largest absolute drop (-$6,900), while Information (NAICS 51) had the fastest rate of decline (-4.56%), narrowly ahead of professional and business services (-4.55%).

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 Q2-2026. The Southeast had the biggest hit, with 8,200 fewer jobs (-0.26%), while the Southwest had the fastest rate of decline (-0.28%).

Revenue grew in just two regions. The Rocky Mountain region led the way, adding an average of $1,100 per business (0.88% growth)—both the largest gain and fastest growth rate of any region. The Plains also grew, more modestly (+$370, 0.26%). The other six regions saw both employment and revenue decline. The Mideast had the steepest revenue drop of any region, both in dollars (-$4,830) and rate (-2.96%).

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 Q2-2026. California had the largest drop (-4,200 jobs, -0.28%); Florida had the fastest rate of decline (-0.30%, -2,600 jobs).

On revenue, 18 of 20 states declined. Texas posted the largest dollar decline (-$5,110), while Oregon saw the fastest rate of decline (-3.85%). Only two states bucked the trend: Michigan led growth, adding $1,740 per business (1.13%)—the largest gain and fastest rate of any state—while Indiana also grew, more modestly (+$290, 0.21%). Outside of those two, every state saw both employment and revenue fall together.

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