Brief Brief:
- Optimism among small businesses owners decreased last month, with the percentage of owners saying it is now a good time to expand business by dropping 5 percentage points to the worst decline since the early days of the Pandemia in April 2020, the National Business Federation said on Tuesday.
- With inflation continuing over the 2% federal reserve goal, the percentage of small businesses Increasing average sales prices increased In the highest monthly growth since April 2021 and the third higher profit since the beginning of the monthly survey in 1986, the NFIB said.
- “The uncertainty is high and is growing in Main Street and for many reasons,” NFIB economist Bill Dunkelberg said in a statement. “Inflation remains a big problem.”
Dive Insight:
Small businesses, which Generate 43% of US economic growthIt again withdrew the plans for employment and capital expenses last month, “all in accordance with the general tone of the financial press,” the NFIB said.
“The economy is still growing, but at a slower and slower pace – the clouds of storm are being formed,” according to the NFIB.
Some economists, including those aboard the Conference and the Bank of America, have recently warned that Trump administration tariffs, immigration and other policy changes risk slowing growth and promoting inflation.
Increasing the costs and prices from tariffs ”It can affect both the import of products and the materials for resale and production and export of products overseas, ” Mark Valentino, the business bank head in Citizens Bank, said in an email.
Also “Immigration policy is closely linked to job costs and small businesses remain careful in this regard,” he said after the reducing NFIB survey results. “Business owners are re -evaluating seller contracts, labor forces and borrowing strategies.”
Customers – also adapting to the new policy landscape – shorten costs in January. Last month, the feeling between consumers and businesses fell.
American families in February express more pessimism about their financial situations of the year than in January, and “unemployment, delinquency and credit access expectations worsened,” New York Fed said.
Consumer expectations for unemployment, or the probability of unemployment growing over the next year, was dropped 5.4 percentage points to 39.4%, its highest level since September 2023, The New York Fed was found in a monthly study.
Meanwhile, the share of families waiting for their financial situation to deteriorate next year increased to 27.4%, the highest level since November 2023, according to the New York Fed.
Data on the family of family and business trust, as well as the signs of growth slowdown, prompted Atlanta to fuel its February 19 forecast for an annual growth rate of 2.3% during the first quarter. Now waits economy during Q1 to shrink 2.4%.
Among the small businesses, the mood has been shaken by pessimism in October, in post -election optimism in December, in the current gloomy perspective, the NFIB said.
“Owners of small businesses have experienced whip of uncertainty over the past four months,” Said the NFIB in a comment.
While pointing out the strain from inflation, 38% of small businesses reported difficulties in filling out job openings, a 3 percentage increase compared to January and the highest level since August 2024, the NFIB said. They consider job costs their biggest challenge.
“In Main Street, compensation will continue to pressure owners to raise prices, one negative for the inflation fight,” the NFIB said. “Salary increases are needed to maintain current employment and, hopefully, help fill vacancies.”
The Federation’s survey revealed some bright spots. Funding and interest rates were the high business problem last month for only 3% of respondents, the same proportion as in January.
“In general, credit markets remain friendly to small businesses,” the NFIB said.