The number of small business owners who say inflation is their top concern rose to its highest level since 1979, the latest small business optimism index found.
The survey, run by the National Federation of Independent Business (NFIB), serves as a temperature check of small businesses, which account for approximately 99.9% of all businesses in the United States. So how small business owners are feeling offers an important look at how the majority of American employers perceive the economy. If they don’t believe the economy is going to do too well in the future, they could pull back on hiring workers and making other business investments—which would rattle the economy even further.
Small business owners haven’t been feeling too optimistic lately because of inflation, which raises operating costs that businesses pass to consumers. More than a third of small business owners (37%) said they plan to raise prices to cope with rising inflation, so it’s likely you might still see higher prices for many goods and services.
Tomorrow we’ll get the latest inflation reading from the Bureau of Labor Statistics when it releases its latest Consumer Price Index. The new index numbers should show you if the Federal Reserve’s aggressive rate hikes have brought inflation down from its 41-year highs.
In a slight sign of improving conditions for small businesses, the NFIB’s overall index of small business owner sentiment ticked up by 0.4 points last month to a score of 89.9. And while that’s a good thing, it was still the sixth consecutive month that the figure was lower than the 48-year average of 98.
Recession fears, inflation, and rising interest rates have been weighing on businesses, but with the U.S. economy still adding jobs, it’s been alleviating worries (for now), which might explain the slightly rosier outlook.
| Article by: Kristin Myers |
