This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter.
Persistent inflation posed the biggest concern for small business owners during the second quarter, eroding their confidence, the U.S. Chamber of Commerce found in a survey.
Concern about price pressures exceeded worries among small businesses over supply chain challenges, borrowing costs, revenue trends, a shortage of talent in the labor pool and the cost of employee benefits including health care, the chamber said. Fifty-seven percent of business owners cited inflation as their No. 1 worry, a higher proportion than in Q1.
Sixty-nine percent of company owners said their small business is in good health, 66% expect to grow revenue during the next year and 35% expect to expand staff during the same period, the chamber said. At the same time, only 33% of small business owners rate the local economy as "good," a slump of 8 percentage points since Q1.
Consumer prices rose last month at a lower-than-forecast annual rate of 3.5% from a 4.2% pace in May, the Bureau of Labor Statistics said Tuesday, moments before Federal Reserve Chair Kevin Warsh pledged to slow inflation to the central bank's 2% goal.
A 5.7% decline in energy prices — including a 9.5% slump in the price of gasoline — accounted for much of the decline in price pressures in June, the BLS reported. Consumer prices excluding volatile food and energy were unchanged last month and rose 2.6% over the 12-month period.
Although inflation has cooled, the Conference Board's Leading Economic Index fell by 0.2% in June to 99.1 following a 0.1% gain in May.
Nevertheless, the LEI's six- and 12-month growth rates were stable, Justyna Zabinska-La Monica, senior manager for business cycle indicators at the Conference Board, said Monday in a statement.
"Consumer spending is weakening, but strong business investment related to AI is expected to support economic activity while inflation continues to improve," she said, noting that the Conference Board raised its forecast for gross domestic product growth this year to 1.9% from 1.8%.
Expectations for improved sales and business conditions jumped in June, helping push up the Small Business Optimism Index to 97.4, an increase of 2.1 points from May, the National Federation of Independent Business said.
Still, the index remained below its historical average for the fourth consecutive month, the NFIB said Tuesday, in line with the weak confidence flagged by the U.S. Chamber of Commerce.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
