(The Center Square) – A new survey found that small business owners are feeling less optimistic about the economy and are concerned about rising inflation.
The recently released National Federation of Independent Business report showed that small business owners’ economic optimism has declined and that more small business owners cite inflation as their top concern more than any other issue.
The NFIB’s economic optimism index fell to 91.3, “the 20th consecutive month below the 49-year average of 98.” The survey also found that nearly a quarter of small business owners cite inflation as their top concern, beating out labor shortages, the supply chain, and other issues.
“Small business owners expecting better business conditions over the next six months deteriorated seven points from July to a net negative 37%, however, 24 percentage points better than last June’s reading of a net negative 61% but still at recession levels,” NFIB said.
This survey comes as the latest federal inflation data shows inflation spiked more than expected in the month of August. The U.S. Bureau of Labor Statistics released both its Consumer Price Index and its Producer Price Index, key markers of inflation, which showed increases of 0.6% and 0.7% in August alone.
“Over 60% of the August rise in the index for final demand goods can be traced to prices for gasoline, which jumped 20%,” BLS said. “The indexes for diesel fuel, jet fuel, home heating oil, beverages and beverage materials, and iron and steel scrap also moved higher. Conversely, prices for fresh and dry vegetables fell 11.5%. The indexes for residential electric power and for industrial chemicals also decreased.”
Those increases are major spikes, ending an encouraging trend of lower inflation so far this year.
A rise in gas prices was a major source of the price increases in August.
According to AAA, the national average price for a gallon of regular gasoline is $3.86, up from $3.80 a week ago, though about the same as the average one month ago. Diesel prices are currently an average of $4.53 per gallon, up from $4.51 one week ago and $4.31 one month ago.
Holly Wade, a small business expert at NFIB, testified before the House Subcommittee on Economic Growth, Tax and Capital Access this week, where she raised many of the concerns facing small businesses.
“Small businesses continue to face economic headwinds including stubbornly high inflation, supply chain disruption, and pervasive workforce shortages,” Wade testified. “These headwinds all affect the competitive landscape for small businesses.”