Small Business Checkpoint: Watching and waiting

Taylor Bowley

July 2025

Halfway through the year and small businesses remain in fair shape, with profitability up 1.8% year-over-year (YoY) in June, the highest level so far this year, according to Bank of America small business account data. However, there are signs of a slowdown in the labor market, and small business payments to hiring firms fell 3.4% YoY in June.
Seasonal hiring in the leisure and hospitality sector has also slowed, with payments to hiring firms by restaurants having fallen from Q1 to Q2 for the first time since the pandemic. Economic uncertainty has spurred small firms to pause hiring.
Uncertainty appears to be driving change on the credit front as well. Banks are tightening credit standards and small businesses are turning to credit cards, leading to a rise in average utilization rate, according to Bank of America small business account data. But the YoY% growth in the share of these business accounts that are making minimum payments has come down significantly in June since the start of the year.

Read our full analysis for a more in-depth look at these trends.

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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