USA Trends and Developments Contributed by: Harold D. Israel, Levenfeld Pearlstein
to the labour market that require businesses to fun - damentally rethink their operating models. A further unknown is the impact of the USD100,000 annual application fee for H1B visa applicants announced on 20 September 2025. Employment market cooling The job report released in September 2025 painted a concerning picture, showing far fewer jobs created than expected. This cooling employment market is exacerbating the current cycle: fewer jobs mean less consumer spending, which leads to reduced busi - ness revenues, which in turn leads to more job cuts. For businesses, this means both reduced demand for their products and services and increased difficulty in maintaining consumer confidence. Hispanic market dynamics Related to immigration policies, companies that serve Hispanic markets are facing a unique set of challeng - es. Consumer behaviour in these markets is shifting as communities respond to policy uncertainty, and some businesses are seeing revenues decrease as custom - ers are not shopping for fear of being detained. Res - taurants, retail stores and service providers that built their business models around serving these commu - nities are finding themselves needing to adjust these models to reflect the impact of these changes in cus - tomer behaviour. Commercial real estate reality The office real estate market presents a particularly complex challenge. While return-to-office mandates might seem like they would help stabilise commer - cial real estate, the reality is more nuanced. As leases expire, some types of businesses, such as profession - al service firms, are looking for greater efficiency in their office footprints. They want smaller spaces with lower overhead, and some are questioning whether they need physical offices at all. This trend is creat - ing a structural overcapacity in commercial real estate that shows few signs of reversing. Housing market jitters Real estate market instability is extending beyond commercial properties into residential markets, with concerning implications for consumer confidence and spending. For example, recent data from Redfin
shows that in the Chicago metro area, 16% of home purchase contracts were cancelled in July 2025, up from 14.8% in July 2024. Nationally, the cancel - lation rate reached 15.3%, with some markets like San Antonio and Fort Lauderdale seeing cancellation rates exceeding 20%. When consumers are uncertain about their largest asset – their home – they tend to pull back on discretionary spending across the board. Post-pandemic debt reckoning Certain businesses are confronting the possibility that the debt-fuelled growth that occurred during the pan - demic may not be sustainable. Low interest rates and abundant liquidity during 2020–22 allowed companies to take on debt loads that seemed manageable at the time. Now, with higher rates and tighter credit condi - tions, refinancing this debt may prove difficult. Loans of last resort Merchant cash advances, while perhaps serving as a lifeline for small businesses experiencing short-term cash flow issues, are now becoming a significant bur - den for many companies. These high-cost financing options are strangling companies as economic condi - tions tighten. The daily or weekly payment structures of these advances are particularly problematic when revenues become unpredictable. Relatedly, more con - sumers are using “buy now pay later” loans to pay for everyday expenses such as rent and utilities as opposed to “big ticket” items such as appliances and furniture, increasing consumer debt. Student loans The three-year pandemic pause on student-loan payments is over, and delinquency rates are rising as borrowers are not timely repaying these loans. It is estimated that nearly six million Americans are at least three months behind on their student loans. Continued delinquencies can lead to default, trigger - ing wage garnishment and loss of tax refunds and/or
Social Security payments. The “two-speed economy”
The Wall Street Journal reported in September that the American economy comprises two distinct econo - mies moving in different directions, one in which high earners and older consumers continue to experience prosperity, while low-income workers have seen wage
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