The failure of Bidenomics has crushed confidence among US small businesses to the lowest level in more than a decade, as the future path of inflation remains a significant concern. Readers must remember small businesses are vital to the economy, contributing 44% of the country's economic activity and creating two-thirds of net new jobs.
The National Federation of Independent Business (NFIB) reported Tuesday that its small-business optimism index declined .9 points to 88.5, the lowest level since the second half of 2012 - or about when the US economy climbed out of the worst financial crisis ever.
Twenty-five percent of business owners identified inflation as the largest issue plaguing day-to-day operations, highlighting the impact of increased costs for inputs and labor. This represents a 2-point increase from February. Additionally, the proportion of businesses that have increased their average selling prices went up by 7 points compared to the previous month.
"Owners continue to manage numerous economic headwinds," Bill Dunkelberg, the group's chief economist, wrote in a statement, as quoted by Bloomberg.
Dunkelberg said, "Inflation has once again been reported as the top business problem on Main Street and the labor market has only eased slightly."
The worsening sentiment among small business owners directly correlates to the rise in consumer prices in the first two months of the year:
- CPI Prints Hotter Than Expected In January As SuperCore Soared
- Inflation Hot: Consumer Prices Hit New Record High, Up 19% Since 'Bidenomics' Began
Rising gasoline prices at the pump, inching closer to the politically sensitive level of $4 a gallon, have likely also contributed to the souring mood.
Last week, the NFIB reported that small businesses' hiring plans in March were the shockingly weakest since May 2020. This report is a major concern, considering small firms are the economic engine of the economy.
The gloom among small business owners is an ominous sign that the US economy is on shaky ground while the federal government recklessly spends to avert a recession before the November elections.
