Read our full analysis for a more in-depth look at these trends.
Small Business Checkpoint: Turning the page?
Small firms ended 2025 with lifted optimism and a late-year hiring rebound — signs of resilience despite lingering cost pressures.
January 2026
Key takeaways
- Small business profitability edged higher in 2025, with the Bank of America small business account inflow to outflow ratio rising slightly above 2024 levels. However, profits lost steam as the year closed, with year over year (YoY) profitability growth turning slightly negative for the second consecutive month in December, reflecting mounting cost pressures.
- In the last few months of 2025, small business uncertainty trended downwards and optimism improved, according to the National Federation of Independent Business. Still, small business uncertainty has remained historically high over the past eighteen months due to a mix of consumer spending trends and policy affects such as tariffs.
- After slowing throughout much of the second half of 2025, small business hiring activity picked up at year end, with payments to hiring firms up 7% from the 2024 average. Small retailers led the rebound, while services continued to lag, leaving the key question for 2026 as whether firms are ready to start hiring again.
Small Business Checkpoint is a regular publication from Bank of America Institute. It aims to provide a real-time assessment of small business spending activities and financial well-being, leveraging the depth and breadth of Bank of America’s proprietary data. Such data is not intended to be reflective or indicative of, and should not be relied upon as, the results of operations, financial condition or performance of Bank of America.
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