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Small business owners’ optimism eased in December, approaching their lowest level since 2013 as the inflation and employment outlook deteriorated in the final month of 2013.
The National Federation of Independent Business (NFIB) optimism index fell to 89.8 last month from 91.9 in November, the group said in a report on Tuesday. Eight of the ten components of the index he fell in December.
Only an 89.5 reading for June 2022 prevented Tuesday’s report from hitting a new 10-year low.
“Overall, small business owners are less optimistic about 2023, with sales and business conditions expected to deteriorate,” NFIB chief economist Bill Dunkelberg said in a report.
Inflation remains the single most important issue affecting SMEs, with 32% of business owners citing it as the biggest issue facing their companies.
Small businesses are passing some of these costs on to their customers, but this impulse may be waning. Owners’ net share of raising average sales prices fell to 43%, the lowest level since May 2021, but his 24% of owners plan to raise prices, which is his 11th. It is decreasing from the monthly figures.
Some economists said signs of easing price pressures were not enough to boost optimism.
“A sharp drop in gasoline prices is usually enough to boost sentiment among small business owners, but the hit from higher interest rates and the current stock market volatility has been a huge one,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. has become a stronger force,” he said. release. “As a result, the index is now at levels where recessions have lasted in the past.”
Labor remains the second biggest issue for small businesses, with 41% of all owners reporting they were unable to fill vacancies during the quarter.
55% of owners reported hiring or looking to hire in December, and 93% of companies hiring or looking to hire had few or no eligible applicants for open positions. I reported no.
Still, the survey’s hiring metric continues to climb, with an adjusted net 17% of small businesses (the difference between those planning to increase headcount and those planning to reduce headcount) expected to increase by three to three years in the future. We plan to create new jobs within the next month. However, this number is lower than the 32% seen in his August 2021.
“While the widely anticipated (predicted) recession did not arrive in 2022, it is still expected this year,” the report said. It’s not felt like it’s coming, and we’re almost certain we’ll see more rate hikes early in the year.”
Dani Romero is a reporter at Yahoo Finance. follow her on her twitter @daniromerotv
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