Read our full analysis for a more in-depth look at these trends.
Small Business Checkpoint: Glass half full
Small business hiring looks strong, but margins are shrinking due to rising costs, leading firms to lean on price hikes.
June 2026
Key takeaways
- Small businesses continue to contribute to job growth, supported by strong hiring activity and external boosts such as FIFA World Cup 2026™ demand in select sectors. However, Bank of America data shows payrolls per small business client declined more than 2% year-over-year (YoY) in May, suggesting that recent hiring strength may be masking underlying softness.
- Despite resilient consumer spending, small business profitability continues to wane, with the inflow-to-outflow ratio declining further in May, according to Bank of America small business account data. Cost pressures, including elevated fuel expenses, are outpacing revenue growth, particularly for firms with <$500K in annual revenue, which are experiencing the largest drag on margins.
- As profitability tightens, small businesses are increasingly adjusting prices and relying on credit to manage operations. National Federation of Independent Business (NFIB) data in May shows a rise in actual and planned price increases, reflecting efforts to offset higher costs. At the same time, utilization rates suggest firms still have some borrowing capacity.
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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