The
National Federation of Independent Business (NFIB) said its
Small Business Optimism Index fell 0.9 point to 88.5 last month,
the lowest level since December 2012. It was the 27th straight
month the index was below the 50-year average of 98.
Twenty-five percent of owners reported inflation was their
single most important problem in operating their business,
reflecting higher input and labor costs, up 2 points from
February. The share of businesses raising average selling prices
rose 7 points from the prior month.
That aligns with a pick-up in consumer prices in the first two
months of the year. Price increases were prevalent in the
finance, retail, construction, wholesale and transportation
sectors. There was also an increase in the share of businesses
raising compensation even as demand for labor is cooling.
The NFIB reported last week that hiring plans among small
businesses in March were the weakest since May 2020.
Nonetheless, small businesses in the transportation,
construction and services industries are experiencing an acute
shortage of workers, both skilled and unskilled.
The government reported last week that the economy added 303,000
jobs in March, with the unemployment rate falling to 3.8% from
3.9% in February.
It is expected to report on Wednesday that the consumer price
index rose 0.3% in March after advancing 0.4% in February,
according to a Reuters survey of economists. The CPI is expected
to have increased 3.4% year-on-year in March after advancing
3.2% in February.
Inflation remains above the Federal Reserve's 2% target.
The U.S. central bank is expected to start cutting interest
rates this year, though the timing is uncertain. The Fed has
kept its policy rate in the 5.25%-5.50% range since July. It has
raised the benchmark overnight interest rate by 525 basis points
since March, 2022.
(Reporting by Lucia Mutikani; Editing by Peter Graff)
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