The rolling uncertainty of 2025 is giving the country's smallest businesses the biggest headaches.

Why it matters: Small companies employ nearly half of all U.S. workers, and are an engine of job growth for the economy.

• Weakness in the small business sector "is a concern when you think of the U.S. labor force in its entirety," ADP chief economist Nela Richardson told reporters earlier this month.
• Small- and medium-sized firms both shed jobs in October, per ADP's most recent report; larger companies gained workers.

Zoom in: A few things are happening here. For starters, small businesses are less able to ride the tariff roller coaster. They have "less muscle," Oxford Economics' Michael Pearce wrote in a new report on small businesses' problems.

• Big firms were able to spend (and borrow) to front-load imports ahead of increases in import taxes. Plus, they have the leverage to negotiate pricing with their suppliers and can pass through costs to customers.

Follow the money: Small firms are more credit-constrained — especially compared to the biggest firms. (A few of the big ones, like Microsoft, have even had lower borrowing costs than the U.S. government this year.)

• That means small players can't make the kinds of AI investments that the big guys are getting into. AI adoption rates are lagging for small firms, according to Census data cited in the Oxford report.
• And AI is, of course, driving much of the economy's growth at the moment.

By the numbers: For the three-month period ending in October, companies with 50 or fewer employees saw a net loss of 88,000 jobs, per private company data from ADP analyzed by Oxford.

• Firms with more than 500 employees gained 151,000 jobs.

Zoom out: The diverging prospects of big and small companies echo the widening gap between low-income Americans, struggling with higher costs, and higher earners buoyed by strong stock market returns.

• "The overall economy has been resilient, but there are all these stories going on underneath the surface," Pearce, who is Oxford's deputy chief U.S. economist, tells Axios.
• Count small businesses among these vulnerable sectors.
• Other worrying signs: rising unemployment rates for Black workers, particularly women, and young adults; plunging economic sentiment for those without stock holdings; and slumping wage growth for the lowest earners.

Yes, but: Some of this could be structural. There was a surge in small business formation during the COVID-19 pandemic, and now some of those firms are going under.

• That's relatively normal; younger firms typically fail at higher rates — "a usual and healthy sign of a dynamic economy," Pearce wrote.

What to watch: This split won't last forever — growth from big technological advances often happens among the biggest firms first, but the small guys do eventually catch up. "In the long run, everyone benefits," says Pearce.

• The catch: The long run could take awhile.

Trump's promised $2,000 tariff checks would probably cost $450 billion but provide small boosts in both economic growth and employment, according to a new analysis by Yale Budget Lab.

Why it matters: At that price, the dividend would wipe out more than a year's worth of tariff income, leaving nothing for the president's other promised uses of the money, like paying down debt and bailing out farmers.

By the numbers: In its analysis, Yale Budget Lab assumes the government sends a $2,000 check to every person in the country with an income under $100,000.

• The government collected $195 billion in tariff revenue in fiscal year 2025 and is on pace to collect about $420 billion in fiscal year 2026.

Between the lines: Yale estimates a 0.3 percentage point boost to GDP growth in 2026 from the checks, and a 0.15 percentage point increase in employment. But researchers said those effects would fade over time.

The intrigue: Yale also modeled just a very slight increase in inflation from the checks, despite fears that another stimulus-like payment would have a similar impact to the inflation-fueling "stimmy" of the Biden era.

• They estimate inflation would increase by less than 0.1 percentage point over the next few years with the checks.

Catch up quick: After months of bringing up the idea, Trump and his economic team have been talking about it more actively in recent days, as the president tries to apply pressure on the Supreme Court to uphold his entire tariff program.

• Trump said yesterday the checks would start going out in mid-2026, though Treasury Secretary Scott Bessent has cautioned that Congress would have to pass legislation authorizing them — an uncertain outcome.