Skip to main content

Impact of Recent Economic Indicators on Minority-Owned Businesses

On June 27, 2024, the Bureau of Economic Analysis (BEA) released the third estimate for Gross Domestic Product (GDP) for Q1 2024, alongside revised estimates for corporate profits and the GDP by industry. On June 28, 2024, the Personal Consumption Expenditures (PCE) index reported a year-over-year increase of 2.6% in May 2024. These indicators provide critical insights into the overall economic health and have significant implications for minority-owned businesses.

GDP Growth and Minority Firms

The third estimate for GDP in Q1 2024 indicates a growth rate of 1.4%. This positive growth is a good sign, suggesting that the economy is slowly expanding. For minority-owned businesses, the increase in GDP can be a double-edged sword. On one hand, higher economic growth can lead to greater availability of credit and investment opportunities, which are vital for the sustainability of minority enterprises. On the other hand, if the benefits of this growth is not equitably distributed, minority-owned businesses may face increased competition without proportional access to the resources needed to compete effectively.

Industry-Specific Insights

Industry data for Q1 2024 reveals sector-specific performance that is crucial for understanding the landscape for minority-owned businesses. According to the data:

- Retail Trade and Construction sectors showed significant contributions to GDP growth. Minority representation in these sectors is substantial, with Black and Hispanic workers making up notable percentages of the workforce.

- Administrative and Support Services and Health Care and Social Assistance sectors also demonstrated strong performance. These sectors are critical for minority employment and ownership, with high percentages of minority employment.

The chart illustrates the contributions to GDP by various industry groups and the percentage of minority employment within these sectors. For example, the Retail Trade sector not only contributed 0.34 percentage points to GDP growth but also represents 38% of minority employer firms, highlighting its importance to minority communities.

Personal Consumption Expenditures (PCE) Index

The PCE index, which measures the average increase in prices for goods and services consumed by individuals, rose by 2.6% year-over-year in May 2024. This increase in consumer prices can impact minority-owned businesses in several ways:

- Cost Pressures: Higher consumer prices can lead to increased costs for raw materials and other inputs, squeezing profit margins for minority-owned businesses, which often operate with tighter margins compared to larger, established firms.

- Consumer Demand: On the flip side, if minority-owned businesses can pass on these costs to consumers without a significant drop in demand, they might maintain or even improve their profitability.

Given the often price-sensitive customer base of minority-owned businesses, the ability to pass on costs without losing customers is limited. Therefore, managing cost pressures through efficient operations and strategic pricing becomes critical.


The recent economic indicators from the BEA, GDP growth and the PCE index, highlight a mixed landscape for minority-owned businesses. While rising overall economic growth presents opportunities, the accompanying cost pressures and competitive landscape pose challenges. Minority-owned businesses need to leverage available resources, such as targeted financial assistance programs and strategic partnerships, to navigate this complex economic environment.

Research Assistant: Eric J. Gordon, Creative Investment Research

Get Bitcoin

Get Bitcoin at

Popular posts from this blog

Maternal Health Financing Facility for Black Women: A Solution to an Urgent Problem

Maternal mortality is a significant issue in the United States, with Black women disproportionately affected. Research conducted by the Centers for Disease Control and Prevention (CDC) has shown that Black women are more likely to die from pregnancy-related causes than their white counterparts. However, the issue is not new, and despite the increasing amount of data available, the disparities have remained unaddressed for far too long.  Creative Investment Research (CIR) is among the organizations that believe there is a solution to the problem. Through our proposed impact investing vehicle , the Maternal Health Financing Facility for Black Women (MHFFBW), we aim to tackle the mortality gap and support Black women during childbirth, which will, in turn, benefit their communities. The Facility, based on legally binding financing agreements containing terms and conditions that direct resources to individuals and institutions capable of addressing supply-side conditions at the heart of

BRICS Summit 2023: Navigating the Transformation of Global Finance

Recent developments in the global financial landscape have captured the attention of the finance world, promising a new era of integration, transformation, and collaboration. Amidst the excitement, however, it is essential to acknowledge the formidable obstacles that stand in the way of realizing these ambitions. The 2023 BRICS Summit , slated to convene amidst this shifting landscape, is poised to be a significant juncture that could have profound implications for the future of international finance. The resurgence of Bitcoin, marked by an impressive, if smaller, year-to-date price surge, has underscored its enduring relevance. Similar concerns surround the exploration of central bank digital currencies (CBDCs). The UK's digital pound initiative, while forward-looking, raises questions about stability, security, and privacy and potential economic power imbalances. The notion of a BRICS digital currency, potentially extended to include several countries, reflects a desire to chall

Projected Impact of Gun Laws on Corporate Profits in Texas

More Fortune 500 companies are located in Texas than in any other state. Texas successfully used low taxes and minimal regulations as bait to recruit companies like Tesla and Oracle. The state promoted these “advantages” in ads highlighting their “free-market” environment and criticizing the "tax and spend policies of liberal leadership" in Democrat-run states. Four million people migrated to Texas over the past ten years. Our economic models predict a reversal, however. State of Texas corporations on the Fortune 1000 list generate $2.2 trillion in revenue, $158 billion in profit. They have a market value of $3.8 trillion and employ 2.5 million people nationwide. We continue to believe this increased corporate presence in Texas imposes a tax on the nation as a whole. Texas allows anyone 21 or older to carry handguns without training or licenses, and maintains lower gun purchase age limits. Beyond the recent abortion bill, which allows people to sue those who "aid and abe