Commercial Pulse Report | 05/19/2025
The latest Experian Commercial Pulse Report reveals a complex but fascinating picture of the U.S. economy and the small business landscape. According to Javier Rodriquez-Paiva’s research, while headline indicators suggest moderation, like slowing inflation and a steady unemployment rate, beneath the surface, disparities in recovery and credit performance continue to deepen. Here’s a breakdown of this week’s major findings.
Watch The Commercial Pulse Update
A Cooling Economy: GDP Contracts, Sentiment Slides
The most attention-grabbing headline this cycle is the 0.3% contraction in Q1 GDP, marking the first quarterly decline since Q1 2022. The Bureau of Economic Analysis attributes the dip to a surge in imports ahead of anticipated tariffs, which disrupted the trade balance and weighed on growth.
Meanwhile, inflation continues to cool. March’s inflation rate landed at 2.4%, down from 2.8% in February, while core inflation—excluding food and energy—fell to 2.8%, its lowest level since 2021. This may offer some relief to consumers and businesses alike, but consumer sentiment dropped sharply to 52.2 in April, reflecting growing unease. It was the fourth consecutive monthly decline, and the lowest reading since July 2022.
Labor Market Holds Steady
Despite the GDP dip, the job market appears stable. April’s unemployment rate held at 4.2%, while the U.S. added 177,000 jobs—a slight slowdown from March, but still a positive sign. Wages rose again, averaging \$31.06 per hour, indicating that employers continue to compete for talent even as other indicators cool.
Small Business Index Ticks Up, Optimism Holds
The Experian Small Business Index rose to 47.2 in March, up from 45.4 in February. That’s the third consecutive monthly increase, signaling moderate optimism among small business owners. However, the index remains 9.3 points below last year’s level, reflecting broader economic uncertainties.
Still, the environment for new ventures remains strong. In March alone, over 452,000 new business applications were filed—a 6.4% increase from February. The rate of business starts has remained significantly elevated since the pandemic, a trend that continues to bolster the small business ecosystem.
K-Shaped Recovery: The Uneven Road Ahead
One of the most critical insights from this report is the continued evidence of a K-shaped recovery—where higher-income households and affluent communities are thriving, while lower-income groups and businesses face mounting financial strain.
Experian’s research shows:
- The top 1% of households have seen income grow over 500% since 1979, while the bottom 20% have only grown by 31%.
- The top 10% hold over 67% of total U.S. wealth, while the bottom 50% hold just 2.4%.
- Retailers in affluent ZIP codes are showing stronger credit performance, including lower delinquency rates, better credit scores, and fewer derogatory filings compared to their peers in low-to-moderate income areas.
These patterns aren’t just numbers—they highlight structural challenges for economic equity and raise questions about how future policy and credit access strategies should evolve.
What This Means for Lenders and Business Leaders
For commercial lenders and business decision-makers, the takeaway is clear: understanding the geographic and demographic context of credit risk has never been more important. The divergence in recovery paths demands more nuanced credit assessment and customer support strategies.
With new business formation still booming and small business owners showing resilience, there are real opportunities—but also growing gaps in financial well-being that could impact portfolio performance over time.
Stay Ahead with Experian
- ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis.
- ✔ Subscribe to our YouTube channel for regular updates on small business trends.
- ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow.
Experian Commercial Pulse Report – Business owners with unpaid student loans carry a higher risk for lenders.
As temperatures rise across the U.S., so does the nation’s appetite for travel—and the Leisure & Hospitality sector is feeling the heat. In this week's Commercial Pulse Report, we examine how soaring consumer demand intersects with evolving credit conditions for businesses in travel, lodging, and transportation. Travel Rebounds, But the Story Is Mixed By every measure, Americans are traveling in droves. AAA projected over 72 million domestic travelers over the July 4th holiday—setting a record. Meanwhile, Memorial Day travel surged across all transportation types, especially road trips, which saw a 3.0% year-over-year increase. However, despite six new TSA checkpoint records in June, major airlines have cut forward-looking forecasts, signaling a notable shift: travelers are increasingly opting for alternatives like road and rail over the skies. This change in travel behavior has direct implications for how different business subsectors access and manage credit. Infrastructure Drives Commercial Credit Trends The Leisure & Hospitality industry is broad and fragmented—from mega-airlines and hotel chains to small sightseeing operators and independent RV campgrounds. This diversity is reflected in commercial credit data. Businesses with heavy infrastructure needs—like airlines and hotels—tend to carry higher loan and credit line balances. Airlines, in particular, average the highest number of commercial trades, a reflection of their large-scale operations and capital intensity. Hotels also hold sizeable credit, but with a twist. While revenues have rebounded beyond pre-pandemic levels, occupancy rates remain flat due to an increase in room supply from new construction. The hotel pipeline stood at 6,211 projects with over 722,000 rooms as of Q3 2024, signaling sustained investment even amid margin pressures. Rental Cars: High Volume, Higher Risk The rental car sector stands out—but not in a good way. Despite being a key enabler of domestic travel, these businesses exhibit the highest commercial credit risk across the industry. According to Experian’s Commercial Risk Classification, 32% of rental car companies are considered Medium-High to High Risk, compared to less than 10% in categories like air transport and sightseeing. The elevated risk may be due to a combination of factors: fleet acquisition costs, multi-location exposure, and operational disruptions during the pandemic. While credit trades in this segment remain high, inquiries have declined over recent years, possibly reflecting tightening lending standards or constrained demand for new credit. Encouraging Risk Trends—With Exceptions Across the broader Leisure & Hospitality industry, there’s been a decline in commercial credit risk since 2020. The share of businesses classified as Medium-High or High Risk dropped from 11.7% to 8.5% as of April 2025. Most firms now fall into the Medium Risk category—a sign of normalization in the sector. Delinquency rates remain low (under 1%), and the average Intelliscore Plus v2 score has remained stable across most subsectors. Still, credit conditions vary sharply by business type, underlining the importance of nuanced risk assessment in portfolio management. Smarter Credit Allocation Starts with Subsector-Level Insight The summer travel surge is a powerful reminder of the sector’s resilience—but not all players are experiencing the boom equally. For credit professionals and commercial lenders, the latest data from Experian suggests a growing divide: infrastructure-heavy firms are leaning into credit, while high-risk subsectors like rental cars may warrant closer scrutiny. Whether your clients are in air transport or roadside accommodations, understanding these credit trends will be key to navigating the second half of 2025. ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis. ✔ Subscribe to our YouTube channel for regular updates on small business trends. ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow. Download the Commercial Pulse Report Visit Commercial Insights Hub Related Posts
Experian’s latest Commercial Pulse Report reveals rising car prices drive demand for used vehicles as commercial credit lines for b2b decline
