What Small Businesses Tell Us About the Economy That Wall Street Can't
GoDaddy (GDDY) and UCLA Anderson Forecast introduced Small Street, a real-time lens tracking digital small business activity.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Summary
GoDaddy (GDDY) and UCLA Anderson Forecast introduced Small Street, a real-time lens tracking digital small business activity. The report finds GoDaddy's Participation Index rose in Q4 2025 versus Q4 2024, with small-business births linked to GDP, payroll growth, and lower unemployment, and strong zip-code level correlations to tiny establishments.
Key metrics: a 1% rise in small business births associates with ~0.18% higher GDP growth, ~0.16% higher payroll growth, 0.15ppt unemployment decline, and a 0.84 correlation with establishments under five employees.
Positive
- Participation Index up in Q4 2025 versus Q4 2024, indicating renewed digital small-business growth
- 1% rise in small business births associates with ~0.18% higher GDP growth
- 0.84 zip-code correlation between GoDaddy entrepreneurs and establishments with fewer than five employees
Negative
- Findings do not imply causation, limiting definitive predictive claims for investors
- Employment effects lag new business formation by roughly three to four quarters, delaying near-term jobs impact
Details
News Market Reaction – GDDY
On Mar 3, the day this news came out, GDDY closed 1.14% above the previous close.
Data tracked by StockTitan Argus for the Mar 3 session.
Key Figures
- Small business births link to GDP
- 1% → 0.18% GDP growth
- Association between small business births and GDP growth in analysis
- Link to payroll growth
- 1% → 0.16% payroll growth
- Association between small business births and payroll employment growth
- Link to unemployment
- 1% → 0.15 ppt decline
- Association between small business births and unemployment decline
- Correlation with tiny firms
- 0.84 correlation
- GoDaddy entrepreneurs vs establishments with fewer than five employees
- Correlation with payroll
- 0.53 correlation
- GoDaddy entrepreneurs vs payroll employment statistics
- Lead time payroll impact
- ≈3 quarters
- Lag between new business formation rise and higher payroll employment
- Lead time unemployment impact
- ≈4 quarters
- Lag between new business formation rise and lower unemployment
Historical Context
-
Reported Q4 and full-year 2025 financial results and hosted earnings webcast.
-
Announced ANS integration with Salesforce MuleSoft Agent Fabric for AI agent discovery.
-
CFO scheduled to present at Morgan Stanley Technology, Media & Telecom Conference.
-
Announced date and webcast details for Q4 and FY 2025 results release.
-
Peer company Rapid7 announced its own Q4 and full-year 2025 earnings date.
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Key Terms
gdp financial
payroll employment growth financial
unemployment financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
New GoDaddy Small Street data shows digital business growth accelerating in late 2025, signalling stronger job gains ahead
By bringing digital small businesses into the picture for the first time, the research shows how entrepreneurship can act as an early barometer of national economic health, complementing rather than replacing established measures. The findings come at a time when financial markets, jobs data, and on the ground, perceptions often tell different stories.
What Small Street Is Showing Today
In the fourth quarter of 2025, GoDaddy's Participation Index rose compared to Q4 2024, signalling renewed growth in digital small business activity nationally. Historically, increases in the index have preceded stronger payroll employment growth and declines in unemployment within three to four quarters. The latest reading points to economic conditions consistent with improving job growth in the months ahead.
The report, "What Small Businesses Tell Us About the Economy That Wall Street Can't" introduces "Small Street" as a complementary economic lens built for this moment, giving small business data a seat alongside traditional market and macroeconomic indicators. While establishment-based data often arrives with a lag or reflects only national trends, Small Street adds a more real-time layer of insight by tracking entrepreneurial activity across millions of digital small and micro-businesses. Drawing on signals such as the number of digital entrepreneurs, new digital ventures, and GoDaddy's proprietary Participation Index, the lens captures shifts within a few months at a highly granular, local level.
Key findings include:
- Small business indicators have a stronger relationship to economic conditions such as GDP growth, payroll employment growth and declines in unemployment than stock market returns.
- Indicators tied to entrepreneurial activity reflect changes in economic conditions earlier than traditional labor market data.
- Digital small business creation identifies new business formation earlier than government datasets.
Looking across decades of national data, the analysis reconfirms that stock market returns are statistically linked to economic outcomes, but the relationships are relatively modest. By comparison, small business indicators, specifically the creation of new businesses frequently with a physical location, show two to five times stronger relationships with real economic conditions.
A
The research also finds that changes in small business activity tend to appear earlier than traditional labor market data. Increases in new business formation are associated with higher payroll employment roughly three quarters later and lower unemployment about four quarters (a whole year) later, suggesting entrepreneurial activity captures shifts in local economic conditions before they are fully reflected in official statistics.
GoDaddy's Small Street data highlights a particularly strong alignment with local business formation. At the zip code level, the number of GoDaddy entrepreneurs has a high correlation (0.84) with establishments employing fewer than five people. And a moderate correlation (0.53) with payroll employment stats. The findings suggest Small Street data identifies early business formation before it appears in many government datasets, and capture that it is a reliable proxy for the same trends as seen with traditional brick and mortar small businesses.
"As traditional economic indicators are often delayed or limited in scope, this research shows why small business activity, particularly digital-first entrepreneurship, deserves greater attention in economic analysis," said Alexandra Rosen, economist and head of GoDaddy's Small Business Research Lab.
"Wall Street remains an important indicator, but near real-time insight into online small business activity offers an additional lens for understanding what is happening in the broader economy, based on activity on Small Street and Main Street."
William Yu, an economist at UCLA Anderson Forecast, said the research highlights the limits of relying on any single indicator to understand economic health.
"Different indicators capture different parts of the economy. What this analysis shows is that early-stage small business activity captures dimensions of local economic change that equity markets alone cannot."
Leading economists agree the analysis provides needed insight on where growth, innovation and job creation are headed.
"This report is an important contribution to how we understand the real economy because it shines a spotlight on where Main Street employers and their employees live and work," said
The researchers emphasize that the findings do not imply causation and are not intended to predict future economic outcomes. Instead, the analysis shows that stock market performance by itself provides an incomplete picture of how economic conditions are experienced, particularly around jobs and opportunity.
The introduction of Small Street alongside Wall Street and Main Street offers journalists, policymakers, and the public a reusable lens for understanding economic conditions today and spotting early shifts as they unfold across communities.
The full report is available at research.godaddy/wallstreet
About GoDaddy
GoDaddy, the world's largest domain name registrar, helps millions of entrepreneurs globally start, grow, and scale their businesses. People come to GoDaddy to name their idea, build a website and logo, sell their products and services and accept payments. GoDaddy Airo®, the company's AI-powered experience, makes growing a small business faster and easier by helping them to get their idea online in minutes, drive traffic and boost sales. GoDaddy's expert guides are available 24/7 to provide assistance. To learn more about the company, visit www.GoDaddy.com.
About GoDaddy Small Business Research Lab
The GoDaddy Small Business Research Lab (formerly known as Venture Forward) analyzes more than 20 million online businesses with a digital presence, defined by a unique domain and active website. Most of these businesses employ fewer than ten people, classifying them as microbusinesses. Since 2018, the program has surveyed more than 50,000 entrepreneurs, making it a leading source of data and insights on microbusiness trends. To learn more, visit www.godaddy.com/research
Source: GoDaddy Inc.
View original content to download multimedia:https://www.prnewswire.com/news-releases/what-small-businesses-tell-us-about-the-economy-that-wall-street-cant-302702602.html
SOURCE GoDaddy
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.