U.S. small business confidence reportedly fell to its lowest level in nearly 9-1/2 years in June amid concerns over inflation but demand in the labor sector remained strong as businesses continued to expand their operations according to one survey released on Tuesday. .
The National Federation of Independent Business (NFIB) reported the Small Business Optimism Index fell 3.6 points last month to 89.5, the lowest level since January 2013. Thirty -four percent of owners said that inflation was their single biggest problem in running their business.
Consumer prices soared, driven by severely affected global supply chains and massive fiscal stimulus from governments at the start of the Covid 19 pandemic. Then the U.S. annual CPI rose at its highest rate since the early 1980s. The situation worsened with the outbreak of Russia’s protracted war against Ukraine, which has led to a spike in food and fuel prices around the world.
Soaring inflation has pressured The Fed to adopt an aggressive monetary policy so that it can put the economy in recession. U.S. central bank has raised its policy rate by 150 basis points since March. It is expected to raise overnight interest rates by another 75 basis points this month.
Waima so, higher borrowing costs and concerns over the recession have not slowed demand for labor. An NFIB survey showed 50% of owners reported job openings they couldn’t fill in June, down one point from the May reading. The vacancies include skilled and unskilled labor.
Strong demand for labor, underlined by stronger -than -expected job growth in June, raised hopes that any economic downturn would be temporary and moderate in nature.
