May Summary:
Last month’s dip was short-lived as May’s economic figures remained strong, showcasing the continued resilience of the U.S. economy.
Reduced tariffs, especially on China, eased market concerns amid ongoing trade talks. The unemployment rate remained steady at 4.2% and wages continued to rise. New business starts remained stable at 447K in May, close to the monthly average of 441K since July 2020, and still well above pre-pandemic levels.
Consumer sentiment and small business optimism increased after recent declines, though uncertainty still affects these surveys. Consumer sentiment was 98.8 in May, a 3-point increase over April, but 11% lower than a year ago. Inflation news was mixed: overall and food inflation saw slight upticks, while core inflation stayed flat and rent inflation dropped to its lowest since November 2021. The Fed’s cautious approach persists, but predictions of a rate cut in the coming months are growing as inflation remains relatively steady and potential signs of job market weakness emerge.
Experian Small Business Index™
The Experian Small Business Index™ assesses the financial health of small business owners and their businesses across the U.S. by combining personal and commercial data. This holistic approach reveals industry trends, state-level insights, and overall financial well-being, making it a valuable tool for identifying growth opportunities and risks.
The Experian Small Business Index monitors the small business environment by tracking trends such as the number of emerging businesses, delinquency rates, credit utilization, and new credit approval rates. Index values range from 0 to 100, with a normal range between 40-60, where values trending below 40 indicate a less favorable business environment than average for owners, and values above 60 indicate a more favorable business environment than average. Favorable environment indicates overall health and ease of access to and usage of credit in the region by a small business owner.
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