March 2024 Small Business Snapshot

Summary

The Small Business Snapshot dated March 18, 2024 reports that inflation returned as a leading issue for small business owners. It says Consumer Price Index data showed the inflation rate at 3.2 percent year over year, and that 23 percent of small business owners reported inflation as the top problem. It says the National Federation of Independent Business (NFIB) monthly Small Business Optimism Index decreased by 0.5 points to 89.4. The snapshot also reports initial unemployment claims of 209,000 for the week ending March 9, 2024, and an unemployment rate that increased to 3.9 percent.

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SMALL BUSINESS SNAPSHOT
Source(print): https://smallbusiness.house.gov/news/documentprint.aspx?DocumentID=405928

SMALL BUSINESS SNAPSHOT 

 smallbusiness.house.gov 

 Cmte Small Business (R) 

 Contact: 

 SMALL BUSINESS SNAPSHOT 

 Washington ,
 March 18, 2024 
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 In the month of March, inflation returned as a leading issue for small business owners, as it remains persistently elevated above the Federal Reserve’s target while the labor market has consistently outperformed expectations. The Consumer Price Index (CPI) data, released earlier this month, showed the inflation rate is currently sitting at 3.2 percent year over year, up from last month and higher than forecast. Core CPI, which excludes the more volatile measurements of food and energy, increased slightly by 0.1 percent. 23 percent of small business owners reported inflation as their top problem, surpassing labor quality as businesses have begun to slow down hiring plans. In addition to the worse-than-expected economic data, the National Federation of Independent Business (NFIB) monthly Small Business Optimism Index decreased further by 0.5 points to 89.4, marking over two consecutive years spent below the 50-year average of 98 percent. Small businesses have struggled to keep up with price increases, with reports of positive profit trends dropping to a net negative 30 percent, a very poor reading. In addition to poor profit trends, future business outlooks have worsened, with a net negative of 39 percent of small business owners expecting better business conditions over the next six months, down one point from last month. This reading is at 50-year low levels and signals severe pessimism from Main Street businesses about their near-term outlook. Inflation has proven to be difficult to bring down to the Federal Reserve’s two percent target, with interest rate cuts no longer expected until this Summer at the earliest. Without imminent interest rate cuts by the Federal Reserve, small businesses are likely to remain pessimistic about their future business prospects. 
 The below March 2024 Small Business Snapshot features numbers and updates to provide more insight into the current small business economy. 
 MAIN STREET MEASUREMENTS: 
 CONSUMER PRICE INDEX  (INFLATION) 
 
 The prices consumers paid for goods and services increased 0.4 percent in February as compared to January and  totaled a 3.2 percent increase when measured over the last 12 months. 
 
 PRODUCER PRICE INDEX 
 
 Wholesale prices  rose 0.6 percent  in February and had an increase of  one percent  year over year. 
 
 JOB OPENINGS 
 
 At the end of January, businesses were unable to fill  8.9 million jobs, 3.4 million workers quit their jobs, and the number of layoffs and discharges changed little. 
 
 UNEMPLOYMENT RATE 
 
 275,000 jobs were created  in February, and the unemployment rate  increased to 3.9 percent . 
 
 LABOR FORCE PARTICIPATION RATE 
 
 The labor force participation rate  remained unchanged at 62.5 percent in February. 
 
 UNEMPLOYMENT INSURANCE WEEKLY CLAIMS 
 
 For the week ending March 9, 2024, the Department of Labor reported that initial unemployment claims were 209,000, a decrease of 1,000 from the previous week’s level. 
 
 The 4-week moving average of initial claims totaled 208,000, a decrease of 500 from the previous week’s average. 

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