Small Businesses Continue to Suffer from Rent Inflation
By Mae Anderson
FILE - Retail spaces for lease are seen near Union Square in San Francisco, Feb. 27, 2024. Rent inflation is a pressure point for small businesses, according to new data from the Bank of America Institute. (AP Photo/Eric Risberg, File)
NEW YORK (AP) — Cost pressures continue to hurt small businesses.
In particular, rent inflation is a pressure point for small businesses, according to new data from the Bank of America Institute. The average monthly share of rent in total payments through May is 9.1%, up significantly from the 2019 average of 5.9%.
Some parts of the country have higher rents. In Las Vegas, for example, the average share of rent in May was more than double the national average.
But easing wage inflation has taken some pressure off of small businesses. Bank of America Institute found total nonfarm payroll growth remains strongest in the South. Payroll payments in cities like Charlotte and Tampa are over 30% higher than in 2019.
To calculate rent share, Bank of America analyzed internal data, specifically from small businesses that automatically pay rent out of their Bank of America accounts.
The average monthly rent payment growth per small business client was up 12% year-over-year in May. The rent payments per client closely track the nonresidential real estate rents component of the Producer Price Index, which suggests the increases are largely due to inflation rather than small businesses upgrading to bigger or better space.
Another bright spot from internal data: A metric called the inflow-to-outflow ratio, which Bank of America Institute views as a proxy for profits, rose in May and reached its highest level since March 2023. However, the ratio still remains on average lower than the past few years.
The social video platform's future remains in doubt, as players scramble to profit from the chaos. Plus: Big oil gets bigger, DOGE downsizes, and tariffs!
Ty Young, CEO of Ty J. Young Wealth Management, joins Cheddar to discuss Trump's moves as he returns to Washington D.C. and how it may affect the U.S. economy.
Starbucks’ decision to restrict its restrooms to paying customers has flushed out a wider problem: a patchwork of restroom use policies that varies by state and city. Starbucks announced last week a new code of conduct that says people need to make a purchase if they want to hang out or use the restroom. The coffee chain's policy change for bathroom privileges has left Americans confused and divided over who gets to go and when. The American Restroom Association, a public toilet advocacy group, was among the critics. Rules about restroom access in restaurants vary by state, city and county. The National Retail Federation says private businesses have a right to limit restroom use.
President Donald Trump is talking up a joint venture investing up to $500 billion for infrastructure tied to artificial intelligence by a new partnership formed by OpenAI, Oracle and SoftBank. The new entity, Stargate, will start building out data centers and the electricity generation needed for the further development of the fast-evolving AI in Texas, according to the White House. The initial investment is expected to be $100 billion and could reach five times that sum. While Trump has seized on similar announcements to show that his presidency is boosting the economy, there were already expectations of a massive buildout of data centers and electricity plants needed for the development of AI.
Chris Ruder, Spikeball Founder and CEO, explains how he and his friends put roundnet on the global map, plus, how Spikeball helps people "find their circle."
