In the month of September, inflation persistently remained as a top issue small business owners are facing. The Consumer Price Index (CPI) data released earlier this month showed the inflation rate is currently sitting at 3.7 percent year over year, up from 3.2 percent last month. Core CPI, which excludes the more volatile measurements of food and energy, decreased 0.4 percent. While small businesses continue to deal with the effects of persistent inflation, they continue to struggle with a labor shortage, with 40 percent unable to fill positions. The National Federation of Independent Business (NFIB) monthly Small Business Optimism Index decreased 0.6 points, marking the 20^th straight month below the 48-year average of 98 percent. The last time the index was at the historic average was in December 2021. Small businesses are facing an uptick in the inflation rate, driving up prices at an increased rate, with gasoline up by more than 10 percent in the last month. Meanwhile, future business outlooks are declining, with a net negative of 37 percent of small business owners expecting better business conditions over the next six months, down seven percent from last month. Small businesses continue to face challenges from all directions, with high interest rates making it more expensive to access capital, inflation cutting into margins, and an ongoing regulatory assault from the Biden administration.

The below September 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 0.6 percent in August as compared to July and totaled a 3.7 percent increase when measured over the last 12 months.

PRODUCER PRICE INDEX

• Wholesale prices increased 0.7 percent in August and had an increase of 1.6 percent year over year.

JOB OPENINGS

• At the end of July, businesses were unable to fill 8.8 million jobs, 3.5 million workers quit their jobs, and the number of layoffs and discharges changed little.

UNEMPLOYMENT RATE

• 187,000 jobs were created in August, and the unemployment rate rose slightly to 3.8 percent.

LABOR FORCE PARTICIPATION RATE

• The labor force participation rate rose slightly to 62.8 percent in August.

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS

• For the week ending September 9, 2023, the Department of Labor reported that initial unemployment claims were 220,000, a 3,000 increase from the previous week’s level.
  • The 4-week moving average of initial claims totaled 224,500, a decrease of 5,000 from the previous week’s average.

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