Small businesses back off price increases as inflation eases
About 29% of business owners reported increasing their average selling prices in June, the lowest percentage since March 2021, according to the latest monthly analysis from the National Federation of Independent Business.
The slight easing in pricing increases comes as overall inflation continues to trend down from the 9.1% year-over-year increase in the Consumer Price Index seen in June 2022. The Bureau of Labor Statistics reported a 3% year-over-year increase in the Consumer Price Index for June 2023. That compares to a pre-pandemic range of 1% to 2.5%.
The NFIB survey also found that:
– Small-business owners expect better business conditions over the next six months, with that expectation metric improving 10 points from May
– 42% of owners reported job openings that were hard to fill, down two points from May but still higher than normal.
– 59% of owners reported hiring or trying to hire in June, down four points from May. Of those owners hiring or trying to hire, 92% reported few or no qualified applicants for the positions they were trying to fill.
But even as inflation trends down, it is not near the Federal Reserve’s 2% target. Meanwhile, incoming economic data has been filled with conflicting signals, with job gains slowing but consumer spending holding up along with new construction.
Small-business sectors with the largest employment growth include agriculture, construction and health services, according to the index. Sectors with the biggest loss of employment include information, leisure and hospitality, and transportation and warehousing.
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