The Bank of America Institute released a new publication today which finds continued resilience in small businesses. New Bank of America small business data shows that, despite economic headwinds, small businesses continue to strengthen in a variety of areas, including credit and debit card spending, business travel expenditures and payroll payments. Overall small business payments per client increased 11% year over year in August, up from 3% year over year in the prior month. Card spending per client increased 13% year over year last month, outpacing July’s 7% growth rate.

One important reason for the continued resiliency in small businesses is the return of business travel. According to the US Travel Association, business travel accounted for more than a quarter of total travel spending in the US prior to the pandemic. Bank of America internal data indicates that the number of travel transactions per small business client is at 90% of the 2019 annual average, the highest level since the pandemic began. This includes airlines, lodging, cruise lines, travel agency, car rental and other transportation. Furthermore, small business card spending per client for travel increased 31% year over year in August, up from 19% in July.

Small businesses also continue to see strength in payroll payments. The average overall payroll spend per client was up 11% year over year in July on a 3-month rolling average, suggesting robust hiring and wage growth momentum. Restaurant and bar payroll payments are easing from recent highs, down to a still resilient 18% year over year in August.

Other highlights of the publication include:

• Small business card spending varied greatly across annual income tiers, and small businesses with greater annual revenues spent at a faster pace than those with lower annual revenues.
• For small businesses with annual sales revenue higher than $1 million, card spending per client for travel was up the most, at 43% year over year in August. This increase was partially due to a reversal of the depressed levels of spending on business travel last August due to the spread of the Delta variant.
• After-tax wages based on the internal Bank of America consumer deposit data for small business clients were up 6.1% year over year on a 3-month rolling basis in August (for more please see our latest Consumer Checkpoint). This outpaces data from the Bureau of Labor Statistics, which finds that average hourly earnings for August increased by 5.2% year-over-year.

“Despite economic headwinds like high inflation, small businesses are heading into the fall with cautious optimism,” said Anna Zhou, economist for the Bank of America Institute. “We see things like the rebound in small business travel and resilience in payroll payments as further evidence the economy is getting back on track.”

Small Business Checkpoint

Small Business Checkpoint is a regular publication from the Bank of America Institute. It aims to provide a real-time assessment of small business spending activities and financial well-being, leveraging the depth and breadth of Bank of America’s proprietary data. Such data is not intended to be reflective or indicative of, and should not be relied upon as, the results of operations, financial conditions, or performance of Bank of America.

See the Small Business Checkpoint for methodology and definitions.

Bank of America Institute

The Bank of America Institute is dedicated to uncovering powerful insights that move business and society forward. Established in 2022, the Institute is a think tank that draws on data and analyses from across the bank and the world to provide timely and original perspectives on the economy, Environmental, Social and Governance (ESG), and global transformation. The Institute leverages the depth and breadth of the bank’s proprietary data, from 67 million consumer and small business clients, 54 million verified digital users, $3.8T in total payments in 2021 and $1.4T in consumer and wealth management deposits. From this robust data set, the Institute provides a unique perspective on the health of the economy. It also elevates thought leadership from throughout the bank that addresses long-term trends and shares these findings with the general public.

Bank of America

Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 67 million consumer and small business clients with approximately 4,000 retail financial centers, approximately 16,000 ATMs, and award-winning digital banking with approximately 55 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

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Reporters may contact:

Miranda Caruso, Bank of America
Phone: 332-238-8374
miranda.caruso@bofa.com