The National Federation of Independent Business Optimism Index edged a bit higher in September [0.3 points to 92.1], continuing the mild upward trend of the past few months.
But, that’s after falling to a pandemic-low back in the spring, as inflation spiked and the Fed answered with sharply rising interest rates.
NFIB’s survey finds the biggest problem small-business owners face right now is inflation.
At a company that makes dumbwaiters and industrial lifts in Chicago, Jim Piper says the prices for materials he uses at his fabricating plant keep going up.
“We have been successful in passing many of those cost increases to our customers, who at this point almost do an eye-roll when we announce another 3% to 4% to 5% increase. It’s just a standard way of doing business this year,” he said.
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The Fed wants price hikes like that to be anything but “standard,” hence its interest-rate hikes.
Which may be starting to work — by slowing down business-owners’ hiring plans, said Becky Frankiewicz at staffing firm ManpowerGroup.
“Actually it’s a good thing for employers — a little release of the pressure valve in this tight labor market,” she said.
Frankiewicz said as competition for workers gets a little less fierce, employers are cutting back on the signing bonuses and other perks they’ve been offering to get people in the door.