In the month of December, both labor and inflation remain large issues small business owners are facing. The Consumer Price Index (CPI) data, released earlier this month, showed the inflation rate is currently sitting at 3.1 percent year over year, down slightly from last month. Core CPI, which excludes the more volatile measurements of food and energy, increased 0.4 percent. Inflation and labor were tied as the top issues small business owners are facing with 43 percent unable to fill open positions. The National Federation of Independent Business (NFIB) monthly Small Business Optimism Index decreased further by 0.1 points, marking the 23^rd straight month below the 50-year average of 98 percent. Small businesses have begun to see upward price pressures easing, but they continue to struggle with prices that are over 17 percent higher than they were when President Biden took office. Meanwhile, future business outlooks are declining, with a net negative of 42 percent of small business owners expecting better business conditions over the next six months, up one point from last month but still pointing towards rough conditions ahead. While Main Street can look forward to price increases easing in the coming months, elevated interest rates from the Federal Reserve are taking inflation’s place, increasing the cost to access capital and making prospective lenders more selective.

The below December 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 0.1 percent in November as compared to October and totaled a 3.1 percent increase when measured over the last 12 months.

PRODUCER PRICE INDEX

• Wholesale prices were unchanged in November and had an increase of 0.9 percent year over year.

JOB OPENINGS

• At the end of October, businesses were unable to fill 8.7 million jobs, 3.6 million workers quit their jobs, and the number of layoffs and discharges changed little.

UNEMPLOYMENT RATE

• 199,000 jobs were created in November, and the unemployment rate decreased slightly to 3.7 percent.

LABOR FORCE PARTICIPATION RATE

• The labor force participation rate remained unchanged at 62.8 percent in November.

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS

• For the week ending December 9, 2023, the Department of Labor reported that initial unemployment claims were 202,000, a decrease of 19,000 from the previous week’s level.
• The 4-week moving average of initial claims totaled 213,250, a decrease of 7,750 from the previous week’s average.

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