In the month of July, inflation and labor shortages continue to be top issues that small businesses are facing. The Consumer Price Index (CPI) data released earlier this month showed the inflation rate is currently sitting at 3%, compared to 4% last month. Core CPI, which excludes the more volatile measurements of food and energy, increased 0.2%. The data is still not close to the Federal Reserve’s goal of 2 percent inflation, with the expectation that the Federal Reserve will raise interest rates again later this month after their pause in June. 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. The National Federation of Independent Business (NFIB) monthly Small Business Optimism Index increased 1.6 percent, marking the 18^th straight month below the 48-year average of 98 percent, confirming the economic struggles many Main Street businesses are facing. As President Biden touts “Bidenomics,” many small businesses continue to feel the pain of his inflationary spending, with inflation still more than twice as high as it was when he took office. While the NFIB’s Small Business Optimism Index ticked up, there are still signs of uncertainty amongst small businesses, with plans to increase employment falling as the impacts of higher wages dig into their margins.  

The below July 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 0.2 percent in June as compared to May but totaled a 3.0 percent increase when measured over the last 12 months.

PRODUCER PRICE INDEX

• Wholesale prices did not change this month and had a modest increase of 0.1 percent year over year.

JOB OPENINGS

• At the end of May, businesses were unable to fill 9.8 million jobs, 4.0 million workers quit their jobs, and the number of layoffs and discharges did not change.

UNEMPLOYMENT RATE

• 209,000 jobs were created in May, and the unemployment rate decreased slightly to 3.6 percent.

LABOR FORCE PARTICIPATION RATE

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

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS

• For the week ending July 8, 2023, the Department of Labor reported that initial unemployment claims were 237,000, a 12,000 decrease from the previous week’s level.
  • The 4-week moving average of initial claims totaled 246,750, a decrease of 6,750 from the previous week’s average.

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