Bi-weekly Deep Dive: Census Bureau BTOS Economic Intelligence
Translating complex business sentiment data into clear insights about where the American economy is heading—no partisan spin, just empirical analysis.
Bi-weekly econometric analysis of the Census Bureau's Business Trends and Outlook Survey. Rigorous analysis, accessible insights, zero partisan spin.
Key Finding: The latest BTOS data shows continued economic headwinds with persistent margin compression. Input costs remain elevated (67.7 index vs 55.1 output price index) while revenue sentiment stays weak with 30.1% reporting decreased revenue vs 13.6% increased. Employment remains stable but with concerning trends in hours worked. The gap between input and output prices has narrowed slightly but still indicates significant business pressure heading into late 2025.
BTOS Index Methodology: Values above 50 indicate net positive sentiment (more increases than decreases), while values below 50 indicate net negative sentiment. The indices are calculated from business owner responses about changes in their operations over the past two weeks compared to the prior two-week period. Our analysis synthesizes ~1.2M business responses into actionable economic intelligence.
Input prices continue rising faster than output prices (67.7 vs 55.1 index), indicating ongoing margin pressure across the economy. While the gap has narrowed from the previous period, businesses remain under significant cost pressure.
Survey Question: "Overall, how would you describe this business's current performance?" Business owners rate their company on a 5-point scale from Excellent to Poor. Additionally, they report how their operating revenues/sales/receipts and demand changed in the last two weeks compared to the previous two-week period.
Performance Index: 52.2 (Above 50 = More positive than negative sentiment)
27.7% rate performance as above average or excellent vs 22.7% below average or poor
Survey asks: "How did this business's operating revenues/sales/receipts change in the last two weeks?"
Survey asks: "How did demand for this business's goods or services change in the last two weeks?"
Net revenue change (13.6% increased - 30.1% decreased). Negative indicates more businesses experiencing revenue declines than increases.
Survey Questions: Business owners report changes in their number of paid employees and total hours worked in the last two weeks. They also indicate whether any employees worked from home for at least one workday (6+ hours). These metrics provide real-time labor market conditions.
Employment Index: 48.4 (Below 50 indicates net job losses)
Hours Index: 46.5 (Well below 50 indicates reduced work hours)
Survey asks: "Did this business have any paid employees who worked from home for at least one workday?"
Employment remains relatively stable with 84.3% of businesses reporting no change. However, net employment continues declining (9.4% decreased vs 6.2% increased). Hours worked show concerning trends with 15.5% reducing hours vs only 8.6% increasing them, suggesting businesses are managing costs through reduced hours rather than layoffs.
Survey Questions: "How did the time it takes for this business to receive deliveries from suppliers change in the last two weeks?" and "How would you describe this business's current inventories?" These track supply chain efficiency and inventory management decisions in real-time.
Net change: +4.9% (more delays than improvements)
Options: Too high, About right, Too low, Not applicable
Values above 50 indicate longer delivery times on average. Index measures net change in delivery speed.
Values above 50 indicate net lengthening of delivery times
Supply chains show modest stress with 9.1% reporting longer delivery times vs 4.2% shorter, resulting in a delivery time index of 53.3. Inventory management appears relatively balanced, though 23.4% report inventories as "too low" compared to 8.4% "too high," suggesting some businesses may be understocked.
Survey Questions: "How did the prices this business pays for goods or services change in the last two weeks?" (input costs) and "How did the prices this business charges for its own goods or services change in the last two weeks?" (output prices). These track inflation pressures from both cost and revenue perspectives.
Input cost pressures have eased slightly but remain elevated. The gap between input and output price increases has narrowed but still indicates margin pressure.
Net cost increase: +35.4% (38.5% - 3.1%)
Net price increase: +10.2% (15.7% - 5.5%)
Narrowing gap indicates some easing of margin pressure on businesses
Difference between businesses raising input vs output prices (38.5% - 15.7%). Large gaps indicate margin compression.
Net output price change (15.7% increased - 5.5% decreased). Shows businesses' ability to pass through costs.
Based on input/output price differential. Still elevated but showing improvement from previous period.
Survey Questions: Business owners are asked about their expectations six months from now (around January 2026) across multiple areas: performance ("How do you think you will describe this business's performance?"), employment levels, hours worked, delivery times, inventory levels, demand, and pricing. These forward-looking indicators help predict economic trends.
Business expectations for the next six months (through January 2026) show cautious stability. The future performance index (52.5) suggests businesses expect conditions to remain steady, while employment expectations (50.3) indicate modest hiring plans. However, input price expectations (72.7) suggest businesses expect cost pressures to continue intensifying.
Businesses expect modest performance improvement
Modest improvement expected in hiring
Significant demand recovery expected
Businesses expect cost pressures to worsen
Radar chart comparing current conditions (blue) with 6-month expectations (pink). Values above 50 indicate positive sentiment.
Cautious optimism for early 2026: While businesses expect demand to recover (+6.4 points) and modest employment growth (+1.9 points) by January 2026, they also anticipate worsening cost pressures (+5.0 points on input prices). This suggests continued challenging conditions where businesses will need to balance growth investments against margin pressure through the remainder of 2025.
Survey Questions: Businesses report on external factors affecting their operations including: "In what ways did changes to interest rates negatively impact this business?" (January 2025 - July 2025 period), "Did this business experience monetary losses due to extreme weather events?" (January 2025 - July 2025 period), and "Did this business change its mix of goods or services in the last two weeks?"
Categories include: Reduced investment, higher borrowing costs, delayed expansion plans, reduced cash flow (Jan 2025 - Jul 2025)
Weather types: Hurricane, flood, drought, heat wave, wildfire, winter storm, tornado, other (Jan 2025 - Jul 2025)
Includes changing product/service offerings, market focus, or business model adaptations
Percentage of businesses affected by each external factor
Interest rates remain the primary external pressure with 29.2% of businesses reporting negative impacts from January through July 2025. This likely includes reduced investment, higher borrowing costs, and delayed expansion plans. Weather events affected 8.7% of businesses during this same period, while 24.1% made strategic pivots in their business mix in the most recent two-week period, suggesting continued adaptive responses to economic pressures.