US small business employment dips in Q3-2025, leisure and hospitality has the largest decrease

The latest quarterly data from the Small Business Index shows US small business employment decreased by 42,200 jobs (-0.33%) in the third quarter of 2025. At the end of Q3-2025, small businesses employed 12,920,600 people, which is 88,200 fewer than at the end of Q4-2024.

Similarly, real quarterly revenue decreased by $10,360 (-6.99%) on average per business in Q3-2025—the second consecutive quarterly decline. In Q3-2025, small businesses had real quarterly revenue of $143,110 per business, on average.

The data is seasonally-adjusted. Revenue data is also adjusted for inflation (shown in 2017 dollars).

By sector: employment and revenue decline across all 12 sectors

The leisure and hospitality sector (NAICS 71-72) had both the largest decrease (-16,700 jobs) and fastest decline (-0.98%) in small business employment in Q3-2025. The education and health services sector (NAICS 61-62) had the slowest decline (-0.08%), with a net loss of 2,220 jobs at small businesses.

The utilities sector (NAICS 22) had the fastest decline in average real revenue (-15.16%), decreasing by $40,380 on average per business in Q3-2025. Wholesale trade (NAICS 42) had the largest decrease (-$46,420 on average per business), declining by 7.62%. See the tables below for details.

By region: employment and revenue decline in all 8 regions

The Mideast (Delaware, District of Columbia, Maryland, New Jersey, New York, Pennsylvania) had both the largest decrease (-11,200 jobs) and fastest decline (-0.56%) in small business employment in Q3-2025. 

New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont) had both the largest decrease (-$13,190 on average per business) and fastest decline (-8.78%) in average real revenue. See the tables below for details.

By state: employment declines in 17 of 20 states

Among the 20 states currently included in the Small Business Index, New York had both the largest decrease (-7,000 jobs) and fastest decline (-0.87%) in small business employment in Q3-2025. Missouri and North Carolina were the only two states with employment growth in Q3-2025, adding 100 and 700 jobs respectively. In Arizona, small business employment was unchanged.

Average real revenue decreased across all 20 states in Q3-2025. Michigan had both the largest decrease (-$15,040 on average per business) and fastest decline (-9.55%) in average real revenue. See tables below for details.

Methodology: For more information about the sample, data sources, and calculations used in the Small Business Index, read the full methodology here.