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Small Businesses
Small business confidence reaches its lowest point in 11 years due to persistent concerns about inflation.
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Lauren Miller
April 20, 2024 - 02:15 am
NFIB Survey Highlights Business Optimism Decline
The NFIB's survey on business optimism revealed a score of 88.5 for March, dropping by nearly a point from February and marking the lowest level since December 2012. A significant portion of respondents, a quarter in total, expressed concerns about inflation, especially regarding escalating input and labor expenses.
NFIB Chief Economist Bill Dunkelberg's Insights
NFIB Chief Economist Bill Dunkelberg remarked on the challenges facing small business owners, highlighting inflation as a persistent issue and noting only slight relief in the labor market. In response to these challenges, a notable percentage of respondents reported raising prices, with more planning additional hikes.
Mixed Indicators on Inflation
Despite some indicators suggesting a slight easing of inflationary pressures, such as the Commerce Department's measurement of personal consumption expenditures prices, which showed a 2.5% annual inflation rate in February, concerns remain prevalent. The upcoming release of the consumer price index is anticipated to show a headline rate of 3.4% and 3.7% on core, exceeding the Fed's target of 2% annual inflation.
Stability in Inflation Expectations but Concerns Persist
While inflation expectations have been relatively stable in recent months, there has been a notable increase in rent expectations. Respondents to a New York Fed survey anticipate rent to rise by 8.7% over the next year, indicating potential challenges in the housing market. Additionally, expectations for increases in gas and food prices remain elevated, underscoring ongoing inflationary pressures.
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