For months now, there have been reports of a low-hire, low-fire labor market. But there are some signs of thawing this week, courtesy of small businesses.Fresh data out of the companies Gusto and Paychex — both of which do payroll for small businesses — reported the best outlook so far this year. Gusto said almost every sector and every region in the U.S. added jobs. Paychex said small business employees saw their wages and hours increase last month.Even before this month’s data, the low hiring numbers weren’t all by choice. Lots of small businesses have been wanting to hire more people for a while.“A few years ago, everybody was looking to staff up because of the huge layoffs or pauses in hiring after COVID,” said Holly Wade, executive director of the National Federation of Independent Business Research Center. Ever since then, she said that small businesses have been having trouble hiring. “That's one of their main problems that they tell us every month is labor quality, finding applicants, filling those positions.”But then big businesses started cutting their workforces, noted Frank Fiorille, chief risk executive at payroll processor Paychex. And now, “there's a better pool of talent because the bigger enterprise companies have probably laid some people off, so now there's people there that they couldn't find or pick from previously,” he said.Small business hiring is also getting a boost from some changes at the federal level.“The tax bill, obviously, and you know, the deregulation, led to maybe an overall better environment,” Fiorille said.Now, some labor force growth at small businesses is seasonal. The report from payroll processor Gusto, for example, said hospitality added 14,000 jobs in May; second only to the consistently strong healthcare industry.“But that, in itself, is a vote in confidence for the summer,” said Nich Tremper, senior economist at Gusto.He characterizes this investment in new jobs as cautious momentum. “This isn't a life-changing number, but it is a steady number. This is showing small businesses looking for opportunities to grow and finding them.There’s also probably more growth on the horizon, said Fiorille, with more tailwinds than headwinds for the rest of 2026.