The U.S. economy is growing faster than expected, but that does not mean Black and minority-owned businesses are benefiting equally.
Three major economic developments this week—the Federal Reserve's interest-rate decision, third-quarter GDP growth, and September inflation data—reveal an economy increasingly divided between strong aggregate growth and mounting financial pressure on smaller businesses.
Federal Reserve Holds Rates Steady
On October 28, the Federal Reserve voted 10–2 to maintain its benchmark interest rate at 3.75%–4.00%, citing continued inflation concerns. Two policymakers favored an additional quarter-point increase.
For Minority Business Enterprises (MBEs), the decision means borrowing costs remain elevated. Many smaller firms face substantially higher financing rates than the Fed's benchmark, limiting their ability to purchase equipment, finance inventory, hire employees, and expand operations.
GDP Accelerates to 3.4%
On October 29, the Bureau of Economic Analysis reported that third-quarter GDP increased 3.4% annualized, accelerating from 2.2% in the second quarter.
Investment, consumer spending, and government spending supported growth. Real final sales to private domestic purchasers increased 4.9%.
Yet strong GDP growth does not necessarily translate into stronger employment or greater opportunities for minority-owned firms. Recall that September payroll employment increased by only 29,000, while Black unemployment reached 7.0%.
The growing divergence between economic output and employment raises important questions about who benefits from capital investment, productivity gains, and technological innovation.
Inflation Continues Squeezing Businesses
September's Personal Consumption Expenditures (PCE) report showed annual inflation of 3.6%, with core inflation at 3.1%.
Consumer prices increased 0.5% during September, while personal income rose only 0.2%.
Although nominal consumer spending increased 0.5%, inflation-adjusted spending was essentially unchanged.
For minority-owned businesses, this combination is particularly concerning. Higher operating costs can reduce profit margins, while weaker household purchasing power threatens sales.
The Trump Triple Squeeze
Creative Investment Research describes this emerging economic condition as the Trump Triple Squeeze:
JOBS: Slower employment growth and weakening labor-market opportunities.
COSTS: Persistent inflation and elevated business operating expenses.
CAPITAL: High interest rates and restricted access to affordable financing.
These pressures can reinforce one another, leaving MBEs financially vulnerable even as national GDP and corporate investment increase.
Economic Growth Must Be More Inclusive
The latest numbers demonstrate that a growing economy is not necessarily an economy that works for everyone.
Corporate investment and productivity may be expanding, but smaller businesses continue confronting expensive credit, rising costs, and uncertain demand.
Creative Investment Research urges policymakers, financial institutions, and corporations to expand affordable capital access, strengthen minority-business procurement, and ensure that MBEs participate in AI, infrastructure, and manufacturing investment.
The central question is no longer simply how fast the economy is growing. It is who is allowed to participate in and benefit from that growth.