Small business profits sink as gasoline prices soar
Summary
Small businesses are making less money because their costs for labor and gas are going up, especially after gas prices rose due to tensions in Iran. Even though sales growth is slowing, many Americans are still starting new businesses at high rates.Key Facts
- Small business profits fell 1.3% in April, the largest drop in two years.
- Gas prices rose sharply after the Iran war affected the Strait of Hormuz, a key shipping route for energy.
- The average price of gas was $4.53 per gallon, 43% higher than a year ago.
- Small businesses spent 31% more on gasoline in April compared to the previous year.
- Sales for small businesses are slowing down despite overall strong consumer spending.
- Businesses with fewer than 250 workers created half of all new jobs in the last five years.
- Americans are starting new businesses at near-record rates, with about 470,000 new business applications per month in 2025.
- New business filings are about 66% higher than before the pandemic.
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