Wade talks about the impact of inflationary pressures and labor quality on small business optimism
WASHINGTON, DC (July 10, 2024) – NFIB Research Center Executive Director Holly Wade joined Yahoo! Finance’s Brad Smith to discuss the challenges facing Main Street as small businesses navigate historic headwinds.
Analyzing data from NFIB’s June SBET survey, Wade highlighted the impact of inflationary pressures and ongoing labor shortages on Main Street businesses.
Watch the interview with Wade here: https://finance.yahoo.com/video/small-business-optimism-ticks-higher-162047903.html
“The optimism index, which is a key indicator for the small business sector, has improved slightly, which is a great sign. It’s up one point from last month, to its highest reading this year. As you say, [small business owners are] Generally speaking, it remains pessimistic… and right now, with inflation and labor quality still being the two main issues they face, small business owners are feeling a lot of pressure to figure out how to retain their current employees, attract applicants for their open positions, and absorb the price increases they continue to face.
“One of the areas that is currently causing the most inflationary pressure is [is] compensation. [Owners] The salary hike is still in the planning stages, and it was only slightly increased last month, so companies are still trying to figure out how to absorb the price. First, it will affect the company’s bottom line, so it will be absorbed by the owner’s take-home pay. Second, companies will try to figure out how to manage their own increased costs, which is certainly difficult when competing with companies big and small.
“Consumers are tired of price increases. They’re hesitant to go out and incur those costs and want to shop more strategically.” [One important challenge for owners is] “Tough choices have to be made about which products and services to raise prices on to stay competitive and attract customers. Figuring out that mix takes a lot of thought, time and consideration from owners and employees.”