The Biden White House has been struggling to get the American public to buy into its positive spin on the economy, which it has dubbed Bidenomics. On Tuesday, a survey of small businesses indicated why that is such a hard sell.
Small business owners have a “dismal” outlook about sales growth and business conditions, said Bill Dunkelberg, the chief economist at the National Federation of Independent Business. The NFIB’s small business optimism index came in at 91.9 for July, up 0.9 points from the prior month but well below the index’s 49-year average of 98.
This was the 19th consecutive month below the average reading.
The share of owners expecting better business conditions over the next six months rose 10 points from June—but it remains historically very negative at a net -30 percent.
Twenty-one percent of owners reported that inflation was their single most important problem in operating their business, down three points from June but still a historically high reading.
The net percent of owners raising average selling prices dropped to a net 25 percent, the lowest since January 2021 but still high by historical measures. Fourteen percent said their average selling prices were lower and 40 percent said they were high. The NFIB said price hikes were most common in finance, retail, wholesale, and construction. A net 27 percent said they are planning on hiking prices in the future.
The NFIB survey is an important window on the economy, as small businesses are often a bellwether for changes in conditions and account for nearly half of private-sector jobs.
“With small business owners’ views about future sales growth and business conditions dismal, owners want to hire and make money now from solid consumer spending,” said Dunkelberg. “Inflation has eased slightly on Main Street, but difficulty hiring remains a top business concern.”
Forty-two percent of owners said they had job openings that were hard to fill, unchanged from June but remaining historically very high.