Main Street bust

Axios - Economic pain is mounting quickly for America's small businesses, raising the chances of a Main Street recession despite an AI-powered growth boom.

The fortunes of mom-and-pop businesses are diverging from their larger counterparts.

• The dynamic isn't new, but the divide is getting bigger, faster. It exposes a vulnerability for President Trump's economic agenda, which top officials have said is focused on reigniting Main Street businesses.

Larger businesses have been able to adapt to a tough economic backdrop — historic tariffs, high interest rates and a more cautious consumer — in ways far more challenging for small companies with fewer resources.

• "They can set prices, they can change suppliers, they can hire contractors instead of permanent employees in a more sophisticated way," says ADP chief economist Nela Richardson. "They have more tools in the toolbox."

The private sector shed 32,000 jobs in November, according to payroll processor ADP. Small firms — those with fewer than 50 employees — accounted for all the losses.

• Those businesses reported a net loss of 120,000 jobs, the largest number small businesses have cut since the onset of the pandemic. Larger businesses grew, but not enough to offset the cuts elsewhere.

The Trump administration shrugged off the ADP data that indicated a hiring bust. Commerce Secretary Howard Lutnick told CNBC that the cuts were due to factors unrelated to tariffs, like immigration crackdowns.  Share this story.