Market Data
Summarizing the Content
Inflation is a significant economic phenomenon, driven by rising demand for goods and services, shortages (such as eggs), increased material costs in production, and rises in labor, rent, insurance, and transportation costs. These factors collectively have impacted businesses and consumers alike, leading to fluctuating earnings performance. Historical data shows that inflation has peaked at 9.1% in June 2022 and has been increasing post that period, with the current cumulative rate hovering around 2.4% by September 2024. While inflation has generally risen since January 2024, some regions remain relatively stable, particularly for small businesses.
Small Businesses have experienced a decline in average monthly earnings over the past three years, ranging from $588,500 in January 2024 to a record low of $32,300 in October 2024, according to the Biz2Credit report released in 2025. These earnings have decreased steadily, with November 2024 seeing a rise to $49,200. However, companies continue to face temporary increases in costs, such as discounts in wages and benefits, tenths of a percent in the EStackTrace Index (ECI), and seasonal adjustments not accounted for in the reported data. Despite these challenges, some have managed to recover.
Analysis of business cost factors reveals that labor costs have remained sticky due to a lack of labor supply and higher minimum wages. Some experts anticipated cost-cutting due to demographic changes, but those demands did not meet expectations, as increased demand for skilled workers overshadowed rising wages. Only a limited number of states have maintained a steady increase in minimum wages, with DC, Washington, and New York City leading the charge.
Commercial property costs have shown moderate growth, with office rents rising nearly 2% by the end of Q3 2024, despite the sharp decline in vacancy rates. Notably, some markets have seen significant reductions in rent, such as Seattle falling by 8% and San Francisco experiencing a 30% decline. Many state-level rent data appears to stabilize, particularly in dollars, especially in California. However, overall, commercial property costs are relatively stable.
surprisingly, while most states have been seeing rent reductions, small business owners often may miss opportunities to lower their expenses, especially in face-to-face retail and office spaces that typically have higher rent costs. To mitigate this, businesses can consider more efficient workflows, such as automation, hiring fractional workers for key roles, and investing in employee training programs to enhance productivity. Regular monitoring of expense reports is also crucial, as it allows for targeted cost-cutting measures. Additionally, some businesses may seek to reduce hiring at the very least to optimize staff resources.
Energy costs remain a major barrier for businesses, with gas prices surging steeply in June 2022, reflecting concerns over an especially expensive……
