By Daniel Stefanski |
American small business owners are not becoming more optimistic with the trends of the nation’s economy.
This week, the National Federation of Independent Business (NFIB) released its Small Business Optimism Index for August 2023, showing a decrease that month, marking twenty straight months that the index has been under the 49-year average of 98.
NFIB revealed that “twenty-three percent of small business owners reported that inflation was their single most important business problem, up two points from last month,” and that “the net percent of owners raising average selling prices increased two points to a net 27% (seasonally adjusted), still at an inflationary level.”
In a statement, NFIB State Director Chad Heinrich said, “For Main Street, inflation has yet to be tamed. Between the pressure on prices and the worker shortage, the challenges of this economy continue to make it difficult to own and operate a small business.”
NFIB Chief Economist Bill Dunkelberg added, “With small business owners’ views about future sales growth and business conditions discouraging, owners want to hire and make money now from strong consumer spending. Inflation and the worker shortage continue to be the biggest obstacles for Main Street.”
The press release issued by NFIB Arizona noted key findings from the Index, including:
- 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.
- Forty percent of owners reported job openings that were hard to fill, down two points from July but remain historically high.
- The net percent of owners who expect real sales to be higher decreased two points from July to a net negative 14%.
NFIB’s unveiling of its Small Business Optimism Index for August preceded the release of the U.S. Bureau of Labor’s Consumer Price Index, which was published Wednesday. The U.S. Bureau of Labor reported that its Consumer Price Index for All Urban Consumers (CPI-U) “rose 0.6 percent in August on a seasonally adjusted basis, after increasing 0.2 percent in July,” and that “over the last 12 months, the all items index increased 3.7 percent before seasonal adjustment.”
The U.S. Bureau of Labor wrote that “the index for gasoline was the largest contributor to the monthly all items increase, accounting for over half of the increase” – as well as “continued advancement in the shelter index, which rose for the 40th consecutive month.” According to the Bureau, “the energy index rose 5.6 percent in August as all the major energy component indexes increased.”
In addition to its Consumer Price Index, the Bureau of Labor also published its Real Earnings Summary on Wednesday, which showed that “real average hourly earnings for all employees decreased 0.5 percent from July to August, seasonally adjusted.”
Arizona Senate President Pro Tempore T.J. Shope reposted a reaction to this week’s economic update, which summarized the August inflation and wages reports. The post, from a Senior Fellow of the Manhattan Institute, said, “I am legitimately baffled by fellow economists who seem to think that a few months of lower inflation negate the 17% price hike since 2021 that continues to outstrip wage growth. Until wages fully catch up, the higher prices will remain a family burden.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.