Small business owners in the United States are feeling less optimistic in March, with sentiment hitting an 11-year low. The National Federation of Independent Business released a survey on Tuesday that found the organization’s optimism index fell to 88.5 last month, the lowest level since December 2012. This is the 27th consecutive month the index has fallen below the 50-year average of 90. .
One of the main concerns of business owners was rising inflation, with 25% of respondents citing higher input and labor costs as significant challenges. This led to an increase in the number of businesses that raised their average selling prices in March, with an increase of 7 points compared to the previous month. Consumer prices also rose in the first two months of the year, reflecting these inflationary pressures.
To combat high inflation rates, the Federal Reserve raises interest rates. Inflation peaked at around 9% in the summer of 2022, prompting the central bank to take action. However, the latest data due on Wednesday is expected to show inflation easing to 3.4%, still above the 2% target set by the Federal Reserve.
