Small business owners across America are not singing the same tune as some stock market players and economists who believe that inflation has peaked or is on the decline. A recent CNBC|SurveyMonkey Small Business Survey indicates that a resounding 78% of entrepreneurs anticipate inflation to persist, showcasing a grim outlook that remains virtually unchanged from the previous quarter’s 77%.
This sentiment on Main Street clashes with recent economic indicators and consumer attitudes. While wholesale prices surged more than anticipated in November, with food prices leading the charge, the producer price index, a gauge of what companies receive for their products, marked a 7.4% year-on-year increase—its slowest pace since May 2021. Concurrently, the University of Michigan Consumer Sentiment Index recorded a higher-than-expected rise, reflecting a dip in inflation expectations though still relatively elevated.
Megan Greene, chief economist at Kroll Global, suggested on CNBC’s “Squawk Box” that “peak inflation is probably behind us.” However, despite these optimistic viewpoints, holiday spending plans reveal a cautious approach, with 41% of consumers intending to spend less than the previous year, driven by inflation concerns. Walmart CEO Doug McMillon emphasized the lingering stress of inflation on American shoppers, acknowledging its uneven impact across different product categories.
While some relief may come from falling gas prices, poised to dip below $3 per gallon for more Americans by year-end, the overarching sentiment among small businesses remains one of apprehension. As the nation grapples with economic crosscurrents, it appears that, for Main Street, the inflation storm is not yet ready to dissipate.