US Small-Business Sentiment Slides to Lowest Level in More Than 11 Years

• The NFIB's Small Business Optimism Index reaching its lowest level in over a decade signals significant concerns among small-business owners. This decline reflects a combination of factors impacting the economic landscape, including inflationary pressures and uncertainties surrounding market conditions.
• The report highlights a notable uptick in worries about inflation among small-business owners. With 25% of respondents citing it as their primary concern, this reflects the tangible impact of escalating input costs and rising wages on businesses' bottom lines. The consequent increase in average selling prices underscores the efforts of businesses to offset these inflationary pressures.
• Despite broader job growth in March, small businesses are facing challenges in recruitment. This is particularly evident in sectors such as transportation, construction, and services, where there is a pronounced scarcity of both skilled and unskilled labour. This shortage not only impedes business operations but also suggests potential constraints on further economic expansion.
• The persistently high inflation, which exceeds the Federal Reserve's target, raises questions about the central bank's response. There are anticipations that the Fed may opt to lower interest rates to counteract inflationary pressures and support economic stability. However, the timing and extent of such measures remain uncertain, leaving businesses in a state of flux as they navigate evolving monetary policies and economic conditions.

(Source: Reuters)