May 2025 Personal Income Decline Threatens Black and Minority-Owned Businesses Across Key Industries

WASHINGTON - EntSun -- The U.S. Bureau of Economic Analysis (BEA) reported personal income fell by 0.4% in May 2025, with disposable personal income (DPI) dropping 0.6% and consumer spending retreating by $29.3 billion. Combined with stubbornly high core inflation (2.7% year-over-year), these trends raise red flags for Black- and minority-owned businesses operating in industries heavily dependent on discretionary spending.

"Many Black- and minority-owned businesses are concentrated in sectors like automotive, food service, and retail, which are the first to feel the pain when household budgets tighten," said William Michael Cunningham, Creative Investment Research. "The latest BEA data confirms that spending cuts are hitting precisely where these businesses earn their livelihoods."

Industry Impacts on Black & Minority-Owned Businesses:

• Motor Vehicles & Parts: Spending plunged –$49.3 billion, threatening minority-owned car dealerships and repair shops already facing financing hurdles.
• Gasoline & Energy Goods: –$19.8 billion drop could slash revenue for many minority-owned gas stations and convenience stores.
• Food Services & Accommodations: –$10.6 billion decline will stress Black- and Latino-owned restaurants still recovering from the pandemic.
• Financial & Insurance Services: –$5.7 billion reduction risks lower client volumes for minority-owned tax prep, advisory, and insurance firms.
• Transportation Services: –$4.0 billion fall may impact Black-owned shuttle, ride-sharing, and logistics businesses.
• Clothing & Footwear: +$5.3 billion rise offers a potential bright spot for minority apparel retailers, but sustainability remains uncertain.
• Health Care: +$11.3 billion increase in spending may bolster Black- and minority-owned clinics, counseling centers, and home healthcare providers.

Other spending changes in furnishings, recreation, and housing signal mixed opportunities but highlight ongoing volatility in consumer behavior. While housing and health care spending rose, these increases can indirectly reduce discretionary income available for local businesses.

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Core PCE Inflation Remains Elevated:
Core personal consumption expenditures (PCE) inflation stood at 2.7% annually in May—above the Federal Reserve's 2% target—compounding affordability challenges for households and limiting spending growth in vulnerable communities.

"These figures show why targeted support for Black and minority entrepreneurs is more urgent than ever," according to Mr. Cunningham. "Without additional relief and better access to capital, many businesses will struggle to survive the current downturn." See: https://www.impactinvesting.online/2025/06/may-2025-bea-personal-income-outlays.html