In the month of September, small business owners expressed rising concerns with their future business outlook as well as for the economy at large, with inflation remaining as the most important issue in running their business. Filling vacancies has also been a persistent problem for small business owners across the board, with 40 percent of owners reporting openings they could not fill, up two points from last month. The Consumer Price Index (CPI) data, released earlier this month, showed the inflation rate declined slightly to 2.5 percent year over year, lower than originally forecasted. Core CPI, which excludes the more volatile measurements of food and energy, rose slightly more than expected by 0.3 percent from the previous month. The National Federation of Independent Business (NFIB) monthly Small Business Optimism Index fell by 2.5 points to 91.1, erasing all of July’s gains and marking the largest drop in optimism in over two years. August also marked the 32^nd consecutive month spent below the 50-year average of 98. The Uncertainty Index rose by another two points up to 92, nearing levels seen at the peak of the pandemic when businesses were increasingly unsure about their future prospects. While uncertainty has continued to rise, this month’s CPI report provides some hope for small businesses, coming in slightly cooler than expected. This coupled with the lower than expected August jobs report and July’s report being revised to the lowest level in over four years means that the Federal Reserve is likely to cut interest rates at their meeting this week. While a rate cut will provide small businesses with some relief for borrowing costs, they are still facing prices over 20 percent higher than just a few years ago along with the worst profit trends seen since March of 2010, continuing Main Street’s struggles.

The below September 2024 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 August as compared to July and totaled a 2.5 percent increase when measured over the last 12 months.

PRODUCER PRICE INDEX

• Wholesale prices increased 0.2 percent in August and had an increase of 1.7 percent year over year.

JOB OPENINGS

• At the end of July, businesses were unable to fill 7.7 million jobs, 3.3 million workers quit their jobs, and the number of layoffs and discharges changed little.

UNEMPLOYMENT RATE

• 142,000 jobs were created in August, and the unemployment rate fell slightly to 4.2 percent.

LABOR FORCE PARTICIPATION RATE

• The labor force participation rate remained unchanged at 62.7 percent in August.

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS

•  For the week ending September 7, 2024, the Department of Labor reported that initial unemployment claims were 230,000, an increase of 2,000 from the previous week’s level.
  • The 4-week moving average of initial claims of initial claims totaled 230,750, up slightly from the previous week’s average.

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