Business Pulse
June 30 - July 13, 2025
Every two weeks, the Census Bureau asks over a million American business owners how business is going. Their answers reveal what's really happening in the economy, without Wall Street spin or political framing.
The latest data shows American businesses getting some breathing room. The profit squeeze is still there, but it's easing just a little. Costs are still rising faster than prices, but both sides of the equation are moderating. If you want to see a full dashboard with additional data from the BTOS bi-weekly survey, check this out!
The Numbers
36.7% of businesses say their costs went up in the past two weeks. Only 14.0% raised their prices. That's a 22.7-point gap still eating into profits, but it's narrowing from the previous period's 22.8 points.
The Input Price Index declined to 67.3 from 67.7, while the Output Price Index also softened to 54.8 from 55.1. Both are moving in the right direction for margin relief.
Key Numbers
36.7%: Businesses with higher costs (down from 38.5%)
14.0%: Businesses that raised prices (down from 15.7%)
22.7 points: The profit-squeezing gap (narrowing from 22.8)
Revenue Shows Signs of Life
The Revenue Index improved to 42.4 from 41.7—still below 50, but heading in the right direction.
30.0% of businesses had revenue decreases in the past two weeks, while 14.7% had increases. That's still more than 2-to-1 against, but the ratio is improving from the previous period's 30.1% to 13.6% split.
When costs moderate and revenue stabilizes, profit margins get a breather. That's what we're starting to see.
How Businesses Are Responding
The "cut hours, not jobs" strategy continues. 15.8% reduced employee hours while 9.6% cut jobs—a larger gap than last period.
This approach preserves trained workers but means smaller paychecks. The Employment Index shows modest job losses at 48.1, while the Hours Index dropped further to 46.4.
Labor Numbers
Employment Index: 48.1 (modest job losses)
Hours Index: 46.4 (significant cuts to work hours)
Remote Work: 30.0% of businesses
What Businesses Expect
Business owners remain cautiously optimistic about the next six months. The Future Demand Index rises from 44.2 to 50.9—a significant jump suggesting they expect meaningful demand recovery.
They're planning modest hiring—employment expectations improve from 48.1 to 50.4.
But here's the catch: they expect costs to surge again. The Future Input Price Index jumps from 67.3 to 72.9—a massive 5.6-point increase.
So their forecast is: demand will recover strongly, but a new wave of cost pressures is coming.
What This Means
We're watching the first signs of margin pressure relief after months of squeeze. Both input and output prices are moderating, giving businesses some breathing room.
The improved revenue trends and strong future demand expectations (50.9 vs current 44.2) suggest the economic fundamentals might be stabilizing.
But business owners are bracing for renewed cost pressures. If they're right about future input prices hitting 72.9, the current relief could be temporary.
The labor strategy of preserving jobs while cutting hours continues, maintaining workforce capacity while managing costs.
What to Watch
Does the margin relief continue or reverse?
Do revenue improvements accelerate?
Can businesses build pricing power before the next cost wave?
Do work hours stabilize as demand recovers?
How accurate are the dire input price expectations?
The next few months will show whether we're seeing a genuine economic stabilization or just a temporary pause in the margin squeeze. Business owners are cautiously optimistic about demand but genuinely concerned about renewed cost pressures.
About This Analysis: The Business Pulse translates the Census Bureau's Business Trends and Outlook Survey into plain English. Every two weeks, I analyze responses from over 1.2 million business owners to show what's really happening in the economy.
Data source: U.S. Census Bureau Business Trends and Outlook Survey, June 30 - July 13, 2025.