Jalama
In a previous article, we discussed the NFIB’s latest survey of small businesses. While optimism is muted, employment is an area of particular concern. This is reiterated by the top issues reported by companies.
As shown in the figure below, where Despite all the issues being highlighted, labor took a backseat in February, with the share of companies citing labor quality as the biggest issue falling by 5 percentage points.
When combined with share-reported labor costs as their biggest issue, 27% of businesses see these labor issues as their most pressing issue.
As shown in the chart below, the combined readings for June and December 2020 were on par with the lowest levels since May 2020.
As for the reasons for the difference, the proportion of respondents who cited inflation as the biggest problem rebounded to 23% from a new low of 20% last month.
At this level, inflation once again becomes the most important issue for small businesses. The increase is also somewhat contrary to the reported price rise index, which fell to a new low in February.
While the increase in stocks reporting inflation as the biggest issue in February hasn’t entirely disrupted the overall downward trend in inflation readings, a more pressing increase is poor sales.
Over the past few years, as inflation has risen to the top of the list, the proportion of businesses reporting poor sales With their biggest problem reduced to an all-time low. Although still at a low level, it has steadily recovered to 7% last year.
Editor’s note: Summary highlights for this article were selected by Seeking Alpha editors.
