SMALL BUSINESS SNAPSHOT
Washington, August 17, 2023
In the month of August, small businesses continue to face top issues like inflation and labor shortages. The Consumer Price Index (CPI) data released earlier this month showed the inflation rate is currently sitting at 3.2 percent, compared to 3 percent last month. Core CPI, which excludes the more volatile measurements of food and energy, decreased 0.3 percent. While small businesses continue to deal with the effects of persistent inflation, they struggle to find skilled workers to staff and grow their businesses. The National Federation of Independent Business (NFIB) monthly Small Business Optimism Index increased 0.9 percent, marking the 19th straight month below the 48-year average of 98 percent. The last time the index was at this historic average was in December 2021. Small businesses continue to feel the pain of Biden’s inflationary spending, with prices up 16.9 percent since he took office, and 52 percent report increased interest rates are impacting their business. Higher interest rates aren’t only impacting loans, but credit cards as well, with 73 percent of small business owners having a personal credit card and 61 percent using them to pay for business-related expenses. With credit card debt hitting $1 trillion, small business owners may find themselves in increasingly difficult financial situations as interest costs accumulate. Despite the increase in the NFIB Small Business Optimism Index, there remain troubling signs ahead as inflation remains persistently elevated and margins continue to shrink.
The below August 2023 Small Business Snapshot features numbers and updates to provide more insight into the current small business economy.
MAIN STREET MEASUREMENTS: