U.S. small business confidence steady in April -NFIB
WASHINGTON (Reuters) – U.S. small business confidence held steady in April after three straight monthly declines, but owners remained worried about high inflation and worker shortages, a survey showed on Tuesday.
The National Federation of Independent Business (NFIB) said its Small Business Optimism Index was unchanged at a reading of 93.2 last month. The index had declined since January.
Thirty-two percent of owners reported that inflation was their single most important problem in operating their business. That was the largest share since the fourth quarter of 1980 and was up a point from March.
The economy is experiencing high inflation caused by shortages, massive fiscal stimulus and low interest rates. Annual inflation is rising at the fastest pace in 40 years.
The Federal Reserve last week raised its policy interest rate by half a percentage point, the biggest hike in 22 years, and said it would begin trimming its bond holdings next month. The U.S. central bank started raising rates in March.
According to the NFIB survey, more owners expected business conditions to worsen over the next six months. But there are signs inflation has likely peaked. The share of owners raising average selling prices eased slightly from March’s record high.
That could be reinforced by the Labor Department’s consumer price report on Wednesday. According to a Reuters survey of economists, the consumer price index likely rose 0.2% last month after surging 1.2% in March. That would result in the CPI gaining 8.1% in the 12 months through April after accelerating 8.5% in March.
Also hinting at a peak in price pressures, the share of businesses reporting they had increased compensation fell three points to 46%. There was also a dip in the proportion intending to raise compensation over the next three months.
This was despite small businesses still struggling to find workers to fill open positions. The share of owners reporting open jobs was unchanged at 47%. According to the NFIB, the worker shortages were most “acute” in the construction, manufacturing, and retail sectors. It said job openings were the lowest in the agriculture and finance sectors.
The government reported last week that there were a record 11.5 million job openings across the economy at the end of March.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)