FEBRUARY 2025 INDUSTRY NEWS AND TRENDS
How tariffs could impact your small business
Many small business owners are on tenterhooks as they wait to see how new tariffs will impact them. Those in manufacturing may ultimately see a boost in production as global competition tapers off, but these gains could be reversed by the impact of retaliatory tariffs that would limit overseas demand for U.S. goods and drive up the cost of materials sourced outside the U.S. At a time when consumers and businesses are already feeling squeezed by years of inflation, no business wants to raise its prices, but many consider this a necessity in the face of narrowing margins.
POLL: Americans are upbeat about the economy
A new poll by Gallup shows that Americans are more optimistic about the economy right now than they have been in the past seven years. Beyond Republican optimism about the impact on the economy of a Republican president, the majority of Americans have a positive outlook on economic growth, the stock market, inflation, and interest rates. Broader improvements in the outlook among these Americans may reflect their confidence in the current president’s ability to handle the economy.
American consumer debt is at an all-time high
In February, the Federal Reserve Bank of New York released a comprehensive look at credit conditions for American households, and the findings show that while consumer spending is solid, the tide could turn if Americans are unable to get their debt under control. In Q4 of 2024, debt levels increased 0.5% to $18.04 trillion, and the share of households missing payments for 90+ days on auto loans and credit cards are at 14-year highs. The report also shows that despite consistently high interest rates, borrowers are using up a greater share of the credit available to them.
SURVEY: Small businesses remain optimistic overall
Despite some uneasiness, the most recent NFIB Small Business Optimism Index shows that optimism about the future of business is higher than the 51-year average. The most recent results indicate that 47% of small business owners expect the economy to improve, and 17% believe it is a good time to expand their business substantially. However, the uncertainty index rose 14 points since the last reading, making it the third-highest reading on record.
