|
The
National Federation of Independent Business (NFIB) said its
Small Business Optimism Index rebounded 1.2 points to 89.7 last
month. The index had slumped in March to the lowest level since
December 2012. Despite the rebound it was the 28th straight
month the index was below the 50-year average of 98.
Twenty-two percent of owners reported that inflation was their
single most important problem in operating their business, down
3 points from March. The share of businesses planning price
hikes dropped 7 points to 26%, the smallest since April 2023.
The proportion raising average selling prices fell three points
to 25%. But the optimism over slower price increases was
tempered somewhat by an elevated share of owners raising
compensation. A 38% share of owners reported increasing
compensation, unchanged from March.
Twenty-one percent planned to boost compensation over the next
three months, also unchanged from March. The NFIB reported last
week that 40% of owners reported job openings they could not
fill in April, rebounding 3 points from March's lowest reading
since January 2021.
"Cost pressures remain the top issue for small business owners,
including historically high levels of owners raising
compensation to keep and attract employees," said Bill
Dunkelberg, NFIB chief economist.
Inflation surged in the first quarter after slowing for much of
last year amid strong domestic demand. Economists are hopeful
that prices will resume their downward trend this quarter amid
signs that the labor market is cooling.
Financial markets expect the Federal Reserve to start its easing
cycle in September, though some economists believe the first
interest rate cut could come in July.
The U.S. central bank early this month left its benchmark
overnight interest rate unchanged in the current 5.25%-5.50%
range, where it has been since July. The Fed has raised its
policy rate by 525 basis points since March 2022.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
[© 2024 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
