Inflation is the top problem for small business owners.
ICYMI: Inflation Is the Top Problem for Small Business Owners |
In case you missed it, inflation is now ranked as the top problem for small business owners, according to a recent survey from the National Federation of Independent Businesses (NFIB). Inflation has risen 8.5% since last year, the highest it's been since the end of 1981. So it's no surprise that these higher costs are impacting both consumers and business owners, especially small employers. Over 60% of small business owners surveyed said inflation has had a "substantial impact" on their business, while one-third reported it having a moderate impact. Over 75% of small business owners pointed to inventory, supplies, and materials as big contributors to higher costs, in addition to higher prices for fuel, like gasoline and diesel. In order to absorb the impact of inflation, 86% of small business owners said they are raising the prices of goods and services, passing their costs on to consumers. Nearly 40% of business owners said raising prices for consumers is covering all or most of the higher costs they have been experiencing.
While the Federal Reserve plans to continue interest rate hikes in order to fight against inflation, small business owners plan to continue to increase prices, especially with inflation still running at a 40-year high. Close to 70% of small employers said they will raise selling prices in the next three months, with about half planning to raise prices between 4% and 9%, and 40% planning to hike prices by 10% or more. So if you're someone who likes to shop local, be prepared to pay more.
- Kristin |
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Underscoring how good the job market is these days, 19.7% of respondents surveyed by the Federal Reserve Bank of New York in March reported at least one job offer—the biggest share since the pandemic hit. |
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For The Balance's fourth Financial Literacy Month IG live series, we're discussing the topic of wealth and its enjoyment. Join The Balance Editor-in-Chief Kristin Myers with featured guest Teri Ijeoma, master investor and founder of Trade and Travel, on Wednesday, May 4, at 12 p.m. EST. Follow us on Instagram to get updates on The Balance's live events this month! |
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A key measure of inflation rises at fastest annual rate since 1982.
Happy Friday! It's Kristin with your daily morning digest. Consumers have been shelling out 0.9% more for goods and services, according to the latest Personal Consumption Expenditures (PCE) Price Index figures for March, released by the Bureau of Economic Analysis this morning. The PCE Price Index is another gauge of inflation, and it shows how much more consumers must spend on household goods and services. The gain last month was slightly higher than February's 0.5% rise, and brought the index's annual rate up to 6.6%, the highest yearly increase since 1982. The biggest contributor to the annual rise was spending on energy, which was 33.9% higher than a year ago, likely due to surges in oil prices. Food expenditures were up 9.2% from last year. The core PCE Index, which excludes more volatile food and energy prices, rose 0.3% last month, the same rate as February's revised gain. It was up 5.2% from a year earlier, just slightly below February's annual rate of 5.3%. The PCE Price Index is also the Federal Reserve's preferred measure of inflation, as it includes a more comprehensive list of expenditures and responds more fluidly to changing consumer preferences than the Consumer Price Index (CPI). As inflation surges, the Fed is widely expected to raise its target federal funds rate by half a percentage point at the next two-day Federal Open Market Committee (FOMC) meeting that begins Tuesday.
Also released this morning, the University of Michigan's final Consumer Sentiment Index reading for April showed a 9.8% jump in sentiment on higher expectations for the economy and personal financial expectations in the year ahead. A sharp drop in gas price expectations played a big part. Rising wages and a stronger labor market helped, too. However, the index remained near decade-long lows as uncertainty about rising inflation, the war in Ukraine, and supply chain disruptions related to COVID-19 lockdowns in China continued to weigh on confidence, holding the index back from further gains.
- Kristin |
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Please Take Our Reader Survey |
Have you been impacted by rising prices? Take our quick survey and let us know. We'll share the results, and your answers are anonymous. Thanks so much! |
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Mortgage rates ticked up slightly, rising for the first time in three days but stayed firmly below their recent peaks. The average on a conventional 30-year fixed mortgage rose to 5.72% from 5.69% the previous business day. Earlier this month, it had vaulted to 6.19%, its highest point since at least 2019. |
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For The Balance's fourth Financial Literacy Month IG live series, we're discussing the topic of wealth and its enjoyment. Join The Balance Editor-in-Chief Kristin Myers with featured guest Teri Ijeoma, master investor and founder of Trade and Travel, on Wednesday, May 4, at 12 p.m. EST. Follow us on Instagram to get updates on The Balance's live events this month! |
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Email sent to: kholish2011.jobsearch@blogger.com
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Dotdash Meredith 28 Liberty Street, 7th Floor, New York, NY 10005
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