The Democrats’ inflation crisis and war against small businesses continued to rage in the month of August. Small businesses and American entrepreneurs became the victims under the Democrats’ latest tax and spend agenda legislation – the Inflation Reduction Act. This radical and reckless law disadvantages small businesses and ironically increases the inflationary pressures on the American economy.
The below August 2022 Small Business Snapshot features numbers and news updates to provide more insight into the current small business economy.
MAIN STREET MEASUREMENTS:
CONSUMER PRICE INDEX (INFLATION)
- The prices consumers paid for goods and services remained unchanged in July as compared to June but totaled an 8.5 percent increase when measured over the last 12 months.
PRODUCER PRICE INDEX
- The producer price index decreased .5 percent in July but registered an increase of 9.8 percent year over year.
JOB OPENINGS
- At the end of June, businesses were unable to fill 10.7 million jobs and a near record 4.2 million workers quit their jobs.
UNEMPLOYMENT RATE
- 528,000 jobs were created in July, and the unemployment rate decreased to 3.5 percent. 5.7 million Americans are unemployed.
LABOR FORCE PARTICIPATION RATE
- The labor force participation rate decreased to 62.1 percent in July.
UNEMPLOYMENT INSURANCE WEEKLY CLAIMS
- For the week ending August 6, 2022, the Department of Labor reported that initial unemployment claims were 262,000.
PERSONAL CONSUMPTION EXPENDITURES PRICE INDEX (CORE PCE which excludes energy and food)
- The core PCE price index increased to 4.8 percent in June when measured year over year.
BUSINESS FORMATION STATISTICS
- Business formation applications totaled 425,698 in July marking an increase of 3.7 percent over last month.
HIGH PROPENSITY BUSINESS FORMATION STATISTICS
- New businesses categorized as having an increased likelihood of having employees and a payroll, otherwise known as High Propensity Businesses, totaled 141,096 (an increase of 3.9 percent) in July.
CONSUMER SENTIMENT
- The initial consumer sentiment reading for August registered 55.1.
COMMERCIAL AND INDUSTRIAL LOAN DATA
- Through July, commercial and industrial loans totaled $2.704 trillion.
SBA LENDING DATA
- The SBA approved a total of $20.9 billion 7(a) Loans through August 5, 2022.
NEWS YOU CAN USE:
National Federation of Independent Business: “Small Business Owners Reporting Inflation as Top Business Problem Reaches Highest Level Since 1979” (HERE)
- “Owners expecting better business conditions over the next six months increased nine points from June’s record low level to a net-negative 52%. Expectations for better business conditions have deteriorated every month from January to June of this year.”
- “Forty-nine percent of owners reported job openings they could not fill in the current period, down one point from June but historically very high.”
- “Nine percent of owners cited labor costs as their top business problem and 21% said that labor quality was their top business problem, remaining in second place behind inflation.”
Job Creators Network: “New Polling: Small Businesses Concerned Over ‘Build Back Broke’ Tax Hikes” (HERE)
- “Nearly two-thirds of small businesses say proposed Biden tax increases will hurt the small business community—a suspicion that has grown since the initial ‘Build Back Broke’ bill was unveiled last year.”
- “Additionally, as prices for small businesses and consumers continue to climb at the quickest pace in 40 years, 80 percent of small business owners don’t believe the Biden administration is doing enough to address it.”
- “As a result, more than half of respondents have passed along at least some of the price increases to consumers; 45 percent have reported a negative impact on their bottom line.”
New York Post: “Inflation Reduction Act Will Cost Middle Class $20B in New Taxes: CBO” (HERE)
- “The Inflation Reduction Act sent to President Biden’s desk will end up forcing working-class Americans to pay billions of dollars in new taxes, according to the nonpartisan Congressional Budget Office.”
- “An analysis by the CBO estimates those earning less than $400,000 — the group on which Biden promised not to raise taxes — will pay an estimated $20 billion more in taxes over the next decade as a result of the Democrat-pushed $740 billion package, which also sets aside $80 billion to hire 87,000 IRS agents.”
- “Small business owners will find themselves in the crosshairs of the new wave of IRS auditors, tax experts said.”
The Wall Street Journal: “Labor Shortage is Vexing Challenge for U.S. Economy” (HERE)
- “As anyone who has lost luggage or waited half an hour for a restaurant check can tell you, America needs way more workers in some parts of the economy.”
- “Economists think so too. Many of them see the imbalance in labor supply and demand as at the heart of the U.S.’s current economic challenges. They say that fixing it is critical to achieving a so-called soft economic landing, in which the highest inflation in four decades comes down without unemployment rising enough to trigger a recession.”
- “The labor-force participation rate—the share of the population 16 years and older working or seeking work—was 62.1% in July, down from 62.4% in March, and much lower than the prepandemic rate of 63.4%, the Labor Department said.”
Fox Business: “Has Inflation Peaked? Maybe, But it Could Be ‘Painfully Slow’ to Fall” (HERE)
- “The cooler-than-expected July inflation data fueled hopes that consumer prices peaked earlier this summer after a year of relentless increases that crushed Americans, created a political firestorm for President Biden and forced the Federal Reserve to hike interest rates at the fastest pace in decades.”
- “The consumer price index climbed 8.5% in July from the previous year, a bigger drop from the 9.1% recorded in June than economists projected. On a monthly basis, the index did not move at all as decreases in the cost of oil, gasoline and airfares offset increases in food and rent.”
- “When excluding more volatile measurements of food and gasoline, prices jumped 5.9% in July, matching the previous month.”
