In the month of June, inflation and labor shortages continue to be one of the top issues that small businesses are facing. The Consumer Price Index (CPI) data released earlier this month showed the inflation rate fell some to 4.0 percent, down from 4.9 percent from the month prior. Core CPI, which excludes the more volatile measurements of food and energy, fell slightly to 5.3 percent. With this persistent inflation, real weekly wages decreased 0.7 percent year-over-year. The data is still a long way from the Federal Reserve’s goal of 2 percent inflation with Chairman Jerome Powell saying, “The process of getting inflation back down to 2% has a long way to go.” While small businesses continue to deal with the effects of persistent inflation, they are also struggling to find skilled workers to staff and grow their businesses. Both of these issues have resulted in U.S. small business confidence remaining near a 10-year low and marking the 17^th consecutive month below the 48-year average, according to the National Federation of Independent Business (NFIB) monthly Small Business Optimism Index, confirming the economic struggles many Main Street businesses are facing. In addition, with the recent bank failures, community lending continues to come under renewed stress, as Federal Reserve Chairman Powell signaled that there will be more rate hikes to come following this month’s pause. Altogether, as President Biden touts a falling inflation rate, it remains more than twice as high as it was when he took office, and Main Street America remains pessimistic about the long-term small business economy.  

The below June 2023 Small Business Snapshot features numbers and 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 increased .1 percent in May as compared to April but totaled a 4.0 percent increase when measured over the last 12 months.

PRODUCER PRICE INDEX

• Wholesale prices decreased 1.6 percent in May but registered an increase of 1.1 percent year over year.

JOB OPENINGS

• At the end of April, businesses were unable to fill 10.1 million jobs, 3.8 million workers quit their jobs, and layoffs decreased slightly to 1.6 million.

UNEMPLOYMENT RATE

• 339,000 jobs were created in May, and the unemployment rate rose to 3.7 percent. 6.1 million Americans are unemployed.

LABOR FORCE PARTICIPATION RATE

• The labor force participation rate remained unchanged at 62.6 percent in May.

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS

• For the week ending June 17, 2023, the Department of Labor reported that initial unemployment claims were 264,000, unchanged from the previous week.
  • The 4-week moving average of initial claims totaled 255,750, the highest average since November 13, 2021.