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.
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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.
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Logistics credit risk is rising according to Experian’s latest Commercial Pulse report, signaling financial strain.
Rising costs are continuing to squeeze American wallets — and perhaps nowhere is that more apparent than in the food sector. According to the latest Experian Commercial Pulse Report (October 14, 2025), food prices are having a profound impact on where and how consumers choose to eat. With the Consumer Price Index for food rising 3.2% year-over-year, both full-service and limited-service restaurants are feeling the heat. Watch the Commercial Pulse Update Specifically, Full-Service Restaurant prices have surged 4.6%, while Limited-Service locations have seen more modest increases of 3.2%, the lowest pace in over a year. As price-sensitive consumers pull back on discretionary spending, Experian’s data shows a notable shift toward more affordable dining options—or a return to eating at home. Credit Demand Is Strong, But Approval May Be Slipping Even with shifting consumer habits, restaurants are not sitting idle. Experian’s credit data reveals that both Full-Service and Limited-Service Restaurants are actively seeking commercial credit — a likely sign of increased working capital needs in the face of inflation and tighter margins. However, access to that credit appears to be narrowing. Commercial inquiries from Full-Service Restaurants have risen to 1.7x pre-pandemic levels. Limited-Service Restaurants follow closely at 1.5x. Yet the number of credit-active Limited-Service establishments has declined, suggesting either a slowdown in approvals or reduced eligibility. This contrast implies that demand for financing is rising faster than approval rates, especially for smaller or newer businesses trying to stay competitive amid rising costs. Shrinking Credit Limits, Rising Utilization Restaurants are not only facing tighter access but also leaner terms. Average credit limits for new commercial card accounts have fallen significantly since 2021: Full-Service Restaurants: Down from $11,500 to under $6,000 Limited-Service Restaurants: Also trending downward Groceries (used as a benchmark for at-home eating): Down from $13,000 to $9,000 At the same time, credit utilization rates are climbing — an early warning sign that businesses are relying more heavily on revolving credit to manage day-to-day operations. Full-Service Restaurants now use 31.9% of available credit, up 4.6 points since 2023. Limited-Service Restaurants trail close behind at 31.8%. Groceries come in at 28.8%, showing increased pressure even in the at-home dining sector. Taken together, this combination of lower credit limits and higher utilization points to a tightening credit environment, which may be challenging for restaurants to navigate through the holiday and post-holiday seasons. Commercial Risk Trends Tell a Mixed Story One of the more nuanced insights in Experian’s report is how different restaurant types are weathering the current environment from a risk perspective: Full-Service Restaurants show only a modest decline in commercial risk scores (–0.8 points), suggesting relative resilience despite financial pressures. Limited-Service Restaurants, interestingly, saw a +1.4 point improvement in risk scores—indicating increased stability and better adaptation to current market conditions. In contrast, grocery retailers—the benchmark for “eat-at-home” sectors—experienced a -1.8 point drop in their risk scores, highlighting greater strain in that segment. This divergence reflects a growing consumer shift toward lower-cost food options like quick-service dining, potentially at the expense of both full-service restaurants and grocers. What It Means for Lenders and Business Strategy These trends carry significant implications for financial institutions, credit providers, and small business advisors: Rising inquiries + shrinking credit limits = greater risk of liquidity stress Stronger risk scores for Limited-Service = opportunity for more targeted lending or product offerings Elevated utilization rates = need to monitor credit performance closely, especially for revolving credit For business owners and operators, understanding these dynamics is crucial to building resilience in a volatile market. Strategic decisions around financing, menu pricing, staffing, and technology adoption will likely make or break performance through the next few quarters. Conclusion: A Sector Under Pressure — but not out While economic headwinds persist, the restaurant industry shows remarkable adaptability. Whether it’s shifting toward leaner operations, targeting lower-income consumers, or increasing credit usage to bridge cash flow gaps, the sector is evolving in real-time. As always, Experian’s insights provide a critical lens into these movements—helping lenders, business leaders, and policymakers make smarter decisions amid uncertainty. For the full analysis, including all small business credit trends, read the latest Experian Commercial Pulse Report. ✔ 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
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