WASHINGTON (Reuters) – U.S. small business confidence fell in April due to concerns about the recent economic outlook and persistent labor shortages, a survey released on Tuesday showed inflation slowing.
According to the National Federation of Independent Business (NIB), last month’s small business optimism index fell 1.1 points to 89.0. It was the 16th straight month that the index remained below its 49-year average of 98.
The share of owners expecting better business conditions in the next six months fell two points to a net negative 49%. Net negative inflation-adjusted sales of 19% are expected, down four points from March.
High interest rates linked to the Federal Reserve’s battle to tame inflation, combined with tight credit conditions after the recent financial market turmoil, are raising fears of a recession this year. The federal government’s fight to raise interest rates is helping to cripple the economy.
Although the U.S. central bank has signaled it may be pausing its fastest monetary policy tightening campaign since the 1980s, the economy is yet to feel the full impact of a total of 500 basis point increases in the policy rate from March 2022.
45 percent of owners reported job vacancies they were unable to fill, up 2 points from March. Despite higher mortgage rates and transportation, the gaps were concentrated in construction. Thirty-seven percent of employers had vacancies for skilled workers, up three points from March.
The government reported last week that there were 1.6 job openings for every unemployed person in March.
The share of small business owners who said inflation was their most important problem fell one point to 23 percent, and was down 14 points from last July’s peak, the highest reading since the fourth quarter of 1979.
33% of owners increased their average selling price, down 4 points. Government data showed on Wednesday that consumer prices are expected to have risen sharply in April, but non-housing services costs are expected to have risen modestly.
(Reporting by Lucia Muticani; Editing by Paul Simao)