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.
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)
Stocks edged lower on Wall Street Thursday morning as U.S. markets reopened for trading after the Christmas holiday.
The S&P 500 fell 0.2%. The benchmark index is coming off a three-day winning streak. The Dow Jones Industrial Average was down 64 points, or 0.2%, as of 10:02 a.m. Eastern time. The Nasdaq composite fell 0.4%.
Big Tech stocks were among the biggest weights on the market. Semiconductor giant Nvidia, whose enormous valuation gives it an outsize influence on indexes, slipped 0.8%. Google parent Alphabet fell 0.7% and Netflix gave up 0.9%. Meta Platforms was 1.1% lower.
U.S. applications for unemployment benefits held steady last week, though continuing claims rose to the highest level in three years, the Labor Department reported.
Treasury yields rose in the bond market. The yield on the 10-year Treasury rose to 4.63% from 4.59% late Tuesday.
Major European markets were closed, as well as Hong Kong, Australia, New Zealand and Indonesia.
Trading was expected to be subdued this week with a thin slate of economic data on the calendar.
Still, U.S. markets have historically gotten a boost at year’s end despite lower trading volumes. The last five trading days of each year, plus the first two in the new year, have brought an average gain of 1.3% since 1950.
So far this month, the U.S. stock market has lost some of its gains since President-elect Donald Trump’s win on Election Day, which raised hopes for faster economic growth and more lax regulations that would boost corporate profits. Worries have risen that Trump’s preference for tariffs and other policies could lead to higher inflation, a bigger U.S. government debt and difficulties for global trade.
Even so, the U.S. market remains on pace to deliver strong returns for 2024. The benchmark S&P 500 is up roughly 26% so far this year and remains near its most recent all-time high it set earlier this month — its latest of 57 record highs this year.
AP Business Writers Elaine Kurtenbach and Matt Ott contributed.
FIL:E - The New York Stock Exchange is shown in New York's Financial District on Dec. 23, 2024. (AP Photo/Peter Morgan, File)
FIL:E - People photograph the New York Stock Exchange in New York's Financial District on Dec. 23, 2024. (AP Photo/Peter Morgan, File)
Lights marking the entrance to a subway station frame the New York Stock Exchange in New York's Financial District on Monday, Dec. 23, 2024. (AP Photo/Peter Morgan)
People walk in front of Tokyo Stock Exchange building Wednesday, Dec. 25, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)
Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between the U.S. dollar and the South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Dec. 26, 2024. (AP Photo/Ahn Young-joon)
Currency traders work at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Dec. 26, 2024. (AP Photo/Ahn Young-joon)
A currency trader talks to another near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Dec. 26, 2024. (AP Photo/Ahn Young-joon)
A currency trader watches monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between the U.S. dollar and the South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, Dec. 26, 2024. (AP Photo/Ahn Young-joon)
