Small business owners in the United States are feeling increasingly pessimistic, with sentiment reaching its lowest level in over 11 years. According to a survey released by the National Federation of Independent Business on Tuesday, the organization’s optimism index dropped to 88.5 last month, the lowest since December 2012. This marks the 27th consecutive month that the index has fallen below its 50-year average of 90.
One of the main concerns reported by business owners was rising inflation, with 25% of respondents citing higher input and labor costs as significant challenges. This led to an increase in the number of businesses raising their average selling prices in March, with a 7-point rise from the previous month. Consumer prices have also shown an uptick in the first two months of the year, reflecting these inflationary pressures.
To combat high inflation rates, the Federal Reserve has been increasing interest rates. Inflation reached a peak of about 9% in the summer of 2022, prompting the central bank to take action. However, despite this effort, data expected to be released on Wednesday is anticipated to show a decrease in inflation to only 3.4%, still above the 2% target set by the Federal Reserve.
