U.S. small businesses experienced job growth for all of 2023 and extended a cycle of consistent job growth for 33-straight months, according to December data from the Paychex Small Business Employment Watch. The Small Business Jobs Index closed the year at 101.21, with a 1.2% growth rate. Hourly earnings growth for U.S. workers in December (3.48%) was down from 4.93% in December 2022. Paychex president and CEO John Gibson praised the resiliency of the small business community, stating that wage inflation has continued to slow. He suggested that policymakers should focus on increasing the participation rate and quality of the U.S. workforce to overcome the challenges of a prolonged tight labor market. The Fed's actions are causing wage inflation to normalize without negatively impacting job growth. As 2024 approaches, small businesses must show resilience in retaining quality employees, accessing growth capital, and navigating government regulations.