Bank of America Institute’s latest “Small Business Checkpoint” report, released May 15, 2025, reveals a complex picture of small business behavior across the country, with signs of sector-specific inventory stocking and mixed trends in hiring activity. The findings are based on internal transaction data and provide a snapshot of small business financial activity in the face of ongoing economic uncertainties.
Stocking Up in Select Sectors
The report shows that small businesses overall are not significantly increasing their inventory levels, despite the recent surge in tariffs contributing to economic uncertainty. However, firms in the manufacturing and services sectors are increasing their inventory-related spending. According to the report, these businesses appear to be “stocking their shelves at an accelerated rate” as they anticipate potential disruptions.
Retailers, on the other hand, are not following the same trend. The report notes that any recent surge in consumer goods imports has likely been offset by “buying ahead” behavior among consumers seeking to avoid price increases. Data from Bank of America also suggests that retail payments to shipping and transportation firms do not reflect a notable increase in inventories.
Moreover, the National Federation of Independent Business (NFIB) data cited in the report shows that a net negative 4% of business owners plan to invest in inventory in the coming months.
Hiring Outlook Remains Unclear
Small business hiring activity showed some improvement in April compared to March. Bank of America’s alternative hiring analysis—tracking small business payments to hiring firms—shows a 6% increase above 2019 average levels. This marks a rise from March, when payments were 2% below the 2019 average. However, the report cautions that the increase could indicate greater difficulty in filling roles rather than increased hiring success.
In support of this, the NFIB found that 34% of small business owners reported having job openings they could not fill in April. The last time this figure was lower was in January 2021.
Recent hiring growth has been inconsistent. While February saw strength due to more processing days and favorable weather, hiring has slowed in the last two months. Data shows a downward trend in hiring payments in both March and April.
Regional Disparities in Payroll Growth
Payroll growth among small business clients was up 5.3% year-over-year (YoY) in April. However, using a three-month moving average, growth was only 0.9% YoY. The Federal Reserve’s April Beige Book supports these findings, indicating that employment was “little changed to up slightly” in most districts.
The report highlights regional variations, with cities in the South faring better than those in the Northeast. Texas cities led payroll growth: San Antonio, Houston, and Austin recorded the highest gains. In contrast, cities like Phoenix and Boston experienced negative YoY payroll growth, possibly due to labor supply constraints from changing economic and immigration policies.
April Payment Trends
Overall, total payments per small business client were up 2.7% YoY in April, though this figure declined from March. While wire transfers saw the strongest YoY growth at 11.4%, credit card and check payments were negative for the month.
The report provides a granular look at spending behaviors, categorizing transactions by method such as ACH, debit card, wire, and check. Wire payments continued to be the most robust channel in April.
Image: Bank of America
