Main Street businesses are losing momentum after a strong post-pandemic rebound, and the latest edition of the PYMNTS Intelligence Main Street Index clearly defines the slowdown. Government data published over 12 months through September 2025 show that these small, typically brick-and-mortar firms grew at less than 1%, slipping behind the pace of U.S. businesses overall for the first time in recent memory. That reversal matters because Main Street has traditionally outpaced the broader economy, helped by its mix of local services, consumer-facing businesses and steady hiring.
A combination of weaker employment and uneven performance across sectors has driven the recent slowdown. Restaurants and retail have been the biggest drags, with both segments contracting over the past year and pulling down the Main Street Index’s employment metric. By contrast, wages continued to climb nearly 3%. Several service-oriented businesses (including fitness clubs, building contractors and healthcare providers) continued to expand. That divergence suggests Main Street is still growing, but in a more selective, less balanced way than in recent years.
The broader picture is similarly mixed. Main Street remains well above its baseline, which ranges back to 2007, but its lead over the rest of the economy has narrowed. Compared with the strong run that followed the pandemic, this edition shows a sector that remains resilient but is now more constrained by weaker consumer demand in discretionary categories, creating a tougher operating environment for smaller firms.
Why Main Street Matters
The three values in Figure 1 come directly from the raw Quarterly Census of Employment and Wages microdata, not from the index itself. For Q3 2025, we sum establishments, employment and total wages across all Main Street industry codes—eating and drinking establishments, retail, contractors, personal services, professional services, healthcare and fitness—and aggregate them at the state level across all 50 states and Washington, D.C. That sum gives the raw Main Street totals: 4.3 million establishments, 38.9 million workers and roughly $2.5 trillion in annualized wages.
The shares (36%, 29% and 25%, respectively) are calculated by dividing each Main Street total by the corresponding national private-sector aggregate from the same dataset, which covers all private employers regardless of size or industry. Because the QCEW reports wages on a quarterly basis, the annual wage figure is the sum of the four most recent quarters. The shares are rounded to the nearest whole percentage point. These figures are re-derived from the raw data each quarter and should not be carried forward from prior editions.
Main Street Falls Behind the Broader Economy
Main Street businesses grew less than 1% in the year through September 2025, trailing the pace of all U.S. businesses for the first time in recent memory.
For most of the past decade, Main Street (i.e., businesses with annual revenues of less than $10 million and a physical location) outpaced the broader economy. After the drop during the early months of the pandemic in 2020, these firms rebounded strongly, extending their lead over larger businesses through mid-2022. In recent quarters, that edge has narrowed.
In the 12 months from September 2024 through September 2025, Main Street grew 0.9%, compared with 1.2% for U.S. businesses as a whole. The gap may seem small, but it marks a reversal: for most of the past decade, Main Street had run ahead. The slowdown is most visible in employment. The number of workers at Main Street businesses slipped 0.3%, which is the first decline outside the pandemic years. The number of establishments continued to grow at a steady 1.6%, and real wages, adjusted for price increases, rose 2.9%.
The index is a weighted average of three factors: the number of businesses, the number of workers employed, and the total real wages paid to those workers. Despite the recent softness, Main Street’s overall index stands 36% above its 2007 starting point. The comparable figure for all U.S. businesses is 25% above that baseline. The structural lead, built over nearly two decades, remains intact, though it has narrowed over the past year.
The gap is wider still when measured against the overall U.S. economy. Real GDP grew approximately 2.3% in the year through September 2025, more than double the Main Street pace and also above the 1.2% for U.S. businesses overall. As Figure 2 shows, all three series tracked broadly together through most of the post-2007 period. By September 2025, the GDP index stands roughly 8 points above Main Street on a 2007 baseline—the widest recorded gap between the two series.
Restaurants and Retail Hit Hardest
Two Main Street business segments contracted over the past year, pulling down employment across the entire index.
Not all Main Street businesses moved in the same direction. The biggest drag in the past year came from two of the index’s largest segments.
Eating and drinking establishments contracted 2.4% in the year from September 2024 through September 2025. Employment at these businesses fell over the period. Wages at restaurants and bars were the only segment in the index to post a decline, falling 1.3%, while every other segment recorded wage gains. Restaurant compensation typically includes tip income alongside base wages, and the wages metric reflects both components. Retail fared almost as badly, with its composite reading down 2.0%. Both segments lost workers over the year.
Together, restaurants and retail carry enough weight in the index that their contraction explains most of the overall employment decline. Without these two segments, Main Street employment would have been roughly flat rather than negative.
The decline in retail is also visible in its business count. The retail establishments subindex fell 1.9% over the year, the sharpest decline among segments. In absolute terms, the retail business count stands just 8% above its level at the start of 2020, while Main Street overall is up roughly 20% over that same period. Brick-and-mortar retail has added fewer locations since 2020 than any other segment in the index.
The long-run picture for retail remains weak. The retail segment’s index today sits at 106, only 6% above its 2007 level in nearly 20 years. Over the same period, Main Street overall has grown by 36%, and professional services by 63%. The gap between professional services and retail is the widest recorded in the index: professional services sits at 163, retail at 106.
Professional Services and Healthcare Lead the Way
Three business segments posted growth well above the Main Street pace over the past year.
Eight segments were tracked in the Main Street Index: restaurants and bars, professional and personal services, building contractors and remodelers, fitness clubs, small healthcare providers and retailers. Three stand out for their recent performance.
Professional services, which include independent lawyers, accountants, real estate agents and consultants, remain the highest-indexed segment at 163. In the most recent 12 months, however, professional services grew just 0.7%, well below its historical pace. Personal care services and repair and maintenance businesses grew in the 1.0% to 1.5% range, roughly in line with the overall Main Street pace.
Fitness and recreational sports clubs posted the strongest growth of any segment in the past 12 months, at 3.2%. Building contractors and remodelers followed at 2.2%, and healthcare providers grew 2.0%. These businesses provide services that consumers tend to treat as ongoing commitments. They include gym memberships, medical visits and home renovation projects that involve scheduled or planned spending, in contrast to the more discretionary activity that drives restaurant and retail traffic.
Five Regions Grow; Northeast Contracts Again
Most Main Street businesses across the country posted gains, but the Northeast has contracted for two consecutive editions of this index.
Five of the six regions tracked in the Main Street Index posted positive growth in the 12 months through September 2025. The Southwest led with a 1.7% gain, followed by the South and Pacific West at roughly 1.2% to 1.3% each. The Midwest also grew by 1.2%, and the Mountain region grew by 0.8%.
The Northeast stands apart. It contracted by 0.8% over the past year, the second consecutive year this region has posted negative growth. Both employment and the number of businesses declined. The Northeast’s index reading of 125 is the lowest among all six regions and 11 points below the national Main Street average.
The Southwest continues to hold the strongest position in absolute terms, with its index at 154, more than 50% above the 2007 baseline. The Pacific West’s 1.2% growth is consistent with the region’s concentration of professional services and healthcare businesses, both of which grew nationally over the period.
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Methodology
The Main Street Index is a periodic metric created by PYMNTS Intelligence to measure the health of U.S. businesses with annual revenue of less than $10 million and physical operations. It is based on three primary factors—new establishment growth, real wages per worker, and employment—using data from the Quarterly Census of Employment and Wages (QCEW) provided by the U.S. Bureau of Labor Statistics. The index tracks employment, business formation and wages relative to a 2007 Q1 baseline.
The 2026 edition introduces four methodological enhancements designed to improve the consistency and interpretive richness of the data:
- Improved Seasonal Adjustment: Seasonal patterns are now handled more consistently across all time periods, resulting in a cleaner and more reliable time series.
- Expanded Comparison Series: A new reference series has been added to provide a broader economic context alongside the Main Street results.
- Macroeconomic Overlay: An additional benchmark has been added to the Composite Index to help readers better situate Main Street performance within the broader economy.
- Stronger Forward Projections: The projection methodology has been refined to improve stability and reduce the risk of anomalous estimates.
These updates do not alter the index’s fundamental methodology or its 2007 Q1 = 100 baseline. Readers comparing values across editions may notice small differences in recent quarters; these reflect the improved treatment of the data, not changes to the underlying source.
