What Small Businesses Tell Us About the Economy That Wall Street Can't

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

News Market Reaction – GDDY

+1.14%

1 alert

+1.14% News Effect

On the day this news was published, GDDY gained 1.14%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Small business births link to GDP: 1% → 0.18% GDP growth Link to payroll growth: 1% → 0.16% payroll growth Link to unemployment: 1% → 0.15 ppt decline +4 more

7 metrics

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

Market Reality Check

Price: $93.13 Vol: Volume 2,716,383 vs 20-da...

normal vol

$93.13 Last Close

Volume Volume 2,716,383 vs 20-day avg 2,837,991 — trading at similar activity levels. normal

Technical Shares at $88.22, trading below the 200-day MA of $139.66 and 54.42% under the 52-week high.

Peers on Argus

GDDY gained 1.22% while key peers like CHKP, FFIV, IOT, NTNX and TOST also rose ...

GDDY gained 1.22% while key peers like CHKP, FFIV, IOT, NTNX and TOST also rose between 0.57% and 5.89%, but the momentum scanner did not flag a coordinated sector move, suggesting today’s action is more stock-specific.

Common Catalyst Two peers (FFIV, NTNX) also had AI-focused headlines, indicating broader interest in AI and digital infrastructure alongside GoDaddy’s small-business data narrative.

Historical Context

5 past events · Latest: Feb 24 (Neutral)

5 events

Date	Event	Sentiment	Move	Catalyst
Feb 24	Earnings release	Neutral	-14.3%	Reported Q4 and full-year 2025 financial results and hosted earnings webcast.
Feb 19	Product integration	Neutral	-2.1%	Announced ANS integration with Salesforce MuleSoft Agent Fabric for AI agent discovery.
Feb 16	Conference appearance	Neutral	+2.3%	CFO scheduled to present at Morgan Stanley Technology, Media & Telecom Conference.
Feb 04	Earnings date notice	Neutral	+1.8%	Announced date and webcast details for Q4 and FY 2025 results release.
Jan 15	Peer earnings date	Neutral	-2.7%	Peer company Rapid7 announced its own Q4 and full-year 2025 earnings date.

Recent Company History

Recent news around GoDaddy has centered on financial disclosures and strategic positioning. On Feb 24, 2026, fourth quarter and full-year 2025 results were released, followed by a 10-K and an 8-K highlighting solid growth and stronger profitability. Earlier in February, GoDaddy announced an integration of its Agent Name Service with MuleSoft and a presentation at a major technology conference. Today’s macro-focused research release adds an economic-data dimension to this recent stream of operational and financial updates.

Market Pulse Summary

This announcement presents GoDaddy’s “Small Street” data as a complementary indicator to traditional...

Analysis

This announcement presents GoDaddy’s “Small Street” data as a complementary indicator to traditional market and labor metrics, linking small business formation to later changes in GDP, payroll employment, and unemployment. For context, GoDaddy recently highlighted solid 2025 growth and profitability in its filings. Observers may watch how consistently these small business indicators lead official data and how prominently GoDaddy’s analytics feature in broader economic discussions.

Key Terms

gdp, payroll employment growth, unemployment

3 terms

gdp financial

"Small business indicators have a stronger relationship to economic conditions such as GDP growth..."

Gross Domestic Product (GDP) measures the total value of goods and services produced within a country over a set period, similar to a company’s annual sales but for an entire economy. Investors watch GDP because it signals how fast the economy is growing or shrinking, which affects corporate profits, consumer demand, interest rates and market confidence — like checking a country’s financial pulse before placing a bet.

payroll employment growth financial

"...relationship to economic conditions such as GDP growth, payroll employment growth and declines in unemployment..."

Payroll employment growth measures how the number of people on employer payrolls changes over a set period, showing whether businesses are adding or cutting paid jobs. Investors watch it like a thermometer for the economy because rising payrolls usually signal stronger consumer income and demand — which can boost company sales, influence interest rates, and sway stock prices — while declines can indicate slowing activity and risk to profits.

unemployment financial

"A 1% increase in small business births is associated with ... a 0.15 percentage point decline in unemployment."

Unemployment is the percentage of people who are able and actively looking for work but currently without a job, often tracked by government surveys. Think of it like empty seats in a theater—unused labor that could be filling demand. For investors it matters because higher unemployment usually means weaker consumer spending, lower corporate sales and profit pressure, and can influence interest rate and policy decisions that move markets.

AI-generated analysis. Not financial advice.

New GoDaddy Small Street data shows digital business growth accelerating in late 2025, signalling stronger job gains ahead

TEMPE, Ariz., March 3, 2026 /PRNewswire/ -- New research from GoDaddy and UCLA Anderson Forecast finds that small business data offers earlier and stronger indication of upcoming U.S. economic performance than traditional measures such as the stock market. Last quarter's data captures digital business activity rising year-over-year.

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 1% increase in small business births is associated with roughly 0.18% higher growth in GDP, 0.16% higher payroll employment growth, and a 0.15 percentage point decline in unemployment.

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 U.S. Chamber of Commerce Chief Economist Curtis Dubay. "By pairing decades of macroeconomic data with GoDaddy's real-time view of digital entrepreneurs, these data show what our local chamber of commerce partners see every day: small businesses are the most direct, timely signal of economic health in communities across America."

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.

 

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SOURCE GoDaddy

FAQ

What did GoDaddy (GDDY) report about small business activity in Q4 2025?

GoDaddy reported its Participation Index rose in Q4 2025 versus Q4 2024, signaling renewed digital small-business growth. According to the company, this uptick historically precedes stronger payroll gains and lower unemployment within three to four quarters.

How does a 1% increase in small business births affect GDP and jobs for GDDY's Small Street?

A 1% increase in small business births links to roughly 0.18% higher GDP and 0.16% higher payroll growth. According to the company, these associations are based on decades of combined macro and digital small-business data.

How much earlier does Small Street detect changes compared with traditional labor data for GDDY?

Small Street signals typically appear earlier: new business formation associates with higher payroll employment about three quarters later and lower unemployment about four quarters later. According to the company, this suggests earlier local economic detection than official stats.

How should investors use GoDaddy's (GDDY) Small Street data compared with Wall Street indicators?

Use Small Street as a complementary, real-time lens rather than a sole indicator; it captures early-stage entrepreneurship trends. According to the company, pairing Small Street with market and macro data gives a fuller view of local job and business shifts.