The Federal Reserve faces a stark choice: Act boldly to lower rates, or watch America’s job engine stall. High borrowing costs are crushing small businesses, slowing homebuilding, and threatening the very growth that has kept our economy resilient. To stem the tide of job losses, the Fed must move decisively and approve three consecutive 50 basis points interest rate cuts.
The evidence is mounting. May and June 2025 job numbers were revised down by 258,000. On Sept. 9 the Bureau of Labor Statistics revised U.S. job figures down by an additional 911,000 for the 12 months ending March 2025. That equates to a total cut of 1.5 million jobs over two years. Initial jobless claims are already ticking up 235,000. These numbers are above expectations and higher than the prior week’s report. Workers see the shift: In July, 62% of Americans said they expected unemployment to rise over the next year, the highest level of pessimism since the Great Financial Crisis of 2008.
Small businesses stand at the center of this story. They employ 61.6 million Americans, nearly half of the workforce, and create two out of every three new private-sector jobs. They are the first to feel the pinch when capital costs rise, because unlike large corporations, they cannot tap bond markets or float stock. Their growth depends on bank loans and credit lines, both of which have more than doubled in cost. For many entrepreneurs, interest rates have risen significantly. That’s the difference between hiring a new worker and holding back, between opening a new location and shutting down expansion plans altogether.
High rates are also crushing homebuilding, driving up housing costs, and sapping consumer confidence. This matters for small firms, which depend on strong local economies and healthy consumer demand. When households feel squeezed, they spend less in restaurants, retail shops, and service businesses. The pain surges outward, slowing hiring and shrinking opportunity.
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