Sign In  |  Register  |  About Daly City  |  Contact Us

Daly City, CA
September 01, 2020 1:20pm
7-Day Forecast | Traffic
  • Search Hotels in Daly City

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Small business optimism hits lowest level since 2012: NFIB

The NFIB's Small Business Optimism Index slid in March to its lowest level since December 2012 amid concerns about inflation, high interest rates and labor market challenges.

Small business optimism declined in March to its lowest level in more than a decade according to a new report from the National Federation of Independent Businesses (NFIB).

NFIB's Small Business Optimism Index, which is compiled monthly through a survey of small businesses, decreased in March by 0.9 of a point to 88.5, which is lowest reading since December 2012 and marks the 27th consecutive month with the index below the 50-year average of 98.

NFIB Chief Economist Bill Dunkelberg said that small business owners' optimism declined as they "continue to manage economic headwinds" and added, "Inflation has once again emerged as the top business problem on Main Street and the labor market has only eased slightly."

One-fourth of small business owners said inflation was the most important problem in operating their business due to higher input and labor costs – up 2 percentage points from February and 1 percentage point from 24% a year ago. 

JAMIE DIMON WARNS INFLATION, INTEREST RATES MAY REMAIN ELEVATED

In line with concerns about inflation, the percentage of owners who reported that they raised average selling prices rose by 7 points from February to a net 28% on a seasonally adjusted basis. The net percentage of small business owners who said they expect real sales to be higher decreased by eight points from February to a net negative 18%.

NFIB wrote that the report's findings indicate the "small business sector is showing signs of a potential slowdown." 

The report also found that 37% of small business owners had job openings that they couldn't fill in the current period, while the share reporting labor quality as their top operating rose by 2 points to 18%.

SURGE IN US SMALL BUSINESSES STARTED AS SIDE HUSTLES

It also found that 38% reported raising compensation, an increase of 3 points from February, which had the lowest reading since May 2021. 

Additionally, a net 21% of small business owners plan to raise compensation in the next three months – an increase of 2 points from February.

The NFIB wrote that the Federal Reserve "has taken notice" of the lingering impact of inflation on the economy and has shifted its rhetoric about potential rate cuts and re-emphasized the need to tamp down inflation.

MARCH JOBS REPORT: HEALTH CARE AND GOVERNMENT SECTORS ADDED THE MOST WORKERS

Higher interest rates have made it harder for small businesses to obtain capital, with a net 8% reporting that their last loan was harder to get than in previous attempts. A net 17% of small business owners reported paying a higher rate on their most recent loan, up 1 point from February.

"The 2024 schedule of anticipated rate cuts have dropped precipitously over the last few months from a possible 6-7 cuts, to 2-3 cuts… maybe," NFIB wrote. "The data are certainly not supportive of cuts at the next two FOMC meetings."

"The BLS reported 303,000 jobs added to the labor market in March. No signs of labor weakness there (but watch for revisions), although 71,000 did come from the public sector, mostly at the local level," it noted.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

"One half of the Fed's mandate looks good, the other half still frustrating Main Street," NFIB added. "In the meantime, small businesses will have to manage higher financing costs a bit longer."

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 DalyCity.com & California Media Partners, LLC. All rights reserved.