Persistent Inflation Threatens Black and Minority-Owned Businesses Despite Strong Consumer Spending
"However, if inflation continues to erode household purchasing power, many neighborhood businesses serving Black and minority communities will experience pressure long before larger national firms."
By: Creative Investment Research
WASHINGTON - June 25, 2026 - PRLog – The latest Personal Consumption Expenditures (PCE) report released today by the U.S. Department of Commerce Bureau of Economic Analysis indicates that inflation remains stubbornly above the Federal Reserve's target, creating growing challenges for Black- and minority-owned businesses that already face higher financing costs and limited access to capital.
According to the report, the Personal Consumption Expenditures (PCE) Price Index—the Federal Reserve's preferred measure of inflation—increased 0.4 percent in May and 4.1 percent over the past 12 months, the highest annual inflation rate in approximately three years. Core PCE, which excludes food and energy prices, increased 3.4 percent year over year, while consumer spending and personal income both rose 0.7 percent, reflecting continued strength in household demand.
Creative Investment Research (CIR) believes the latest inflation data point to an increasingly difficult operating environment for minority-owned businesses.
"Persistent inflation is creating a two-speed economy," said William Michael Cunningham, Founder and Chief Economist of Creative Investment Research. "Large firms generally possess greater pricing power, stronger balance sheets, and better access to capital. Many minority-owned businesses operate with narrower margins and higher borrowing costs, making them significantly more vulnerable to prolonged inflation."
Minority-owned firms are heavily represented in sectors including construction, transportation and logistics, hospitality, retail, health care, and personal services—industries that continue to experience elevated input costs.
Higher inflation also increases the likelihood that the Federal Reserve will keep borrowing costs elevated. Because minority-owned firms are more likely to rely on short-term financing, higher interest rates can disproportionately constrain business expansion and investment.
Despite these challenges, continued consumer spending presents opportunities for firms positioned to manage rising costs effectively.
"The increase in consumer spending demonstrates that demand remains resilient," Cunningham added. "However, if inflation continues to erode household purchasing power, many neighborhood businesses serving Black and minority communities will experience pressure long before larger national firms."
CIR notes that procurement and affordable capital become increasingly valuable during periods of sustained inflation because they provide stable revenue streams and improve business resilience.
"Supporting minority-owned businesses during periods of persistent inflation is not simply a matter of equity," Cunningham concluded. "It strengthens domestic supply chains, promotes competition, preserves jobs, and contributes to long-term economic growth."
For more, see: https://www.impactinvesting.online/2026/06/may-2026-pce-i...
Contact
William Michael Cunningham
***@creativeinvest.com
