Paychex CEO explains why he doesn’t see a recession on the horizon

Paychex CEO John Gibson told CNBC’s Jim Cramer on Wednesday he doesn’t think a recession is imminent. Small businesses are optimistic, he said, even though they are concerned about the macroeconomy and the political sphere.

“I’m not seeing any signs of a recession in our data. The underlying labor market remains fundamentally healthy,” Gibson said. “We continue to see moderate growth for small businesses, we see wages continuing to be moderate.”

Paychex provides a number of services to small and medium-sized businesses, including payroll and human resources. The company exceeded earnings expectations when it reported Wednesday morning, and by close, shares were up a little over 4.20%.

According to Gibson, small businesses are “expressing optimism and uncertainty all at the same time.” He said he hopes that uncertainty will calm down after April 2, when President Donald Trump is expected to set new tariffs. Gibson claimed small business are resilient “regardless of what’s going on in Washington,” saying they continue to lead the economy despite crises like fires, hurricanes, floods and the pandemic. Generally, he said, “entrepreneurs are optimists.”

Gibson also described how artificial intelligence is changing business, saying that Paychex has been incorporating AI into its products for the last three years. He said small businesses are already using AI to drive productivity. According to Gibson, “when we package the AI technology with our proprietary data set,” it can give companies insights that let them “really punch above their weight.

“They can now compete against bigger companies and they can be more effective in competing in their local markets,” he said.

Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.

Disclaimer The CNBC Investing Club Charitable Trust holds shares of BlackRock.