The latest Consumer Price Index (CPI) released by the Bureau of Labor Statistics showed that overall inflation is leveling off as the US economy saw a 0.1% month-over-month increase for All Urban Consumers in November, with a 3.1% rise over the past year.
But the Freedom Economy Index, a survey of 70,000 small business owners conducted by RedBalloon and PublicSquare, revealed that 91% of respondents anticipate that inflation will continue at high levels. This is up from 87% in October. This may be one of the reasons why 59% of respondents reported an increase in working hours this year.
When asked in an open-ended question why they were working more hours one business owners said, “Inflation and interest rates.” Another said,.“Inflation has decreased consumer demand. High interest rates have suppressed buying decisions on major purchases.”
"Bidenomics is hitting Main Street more than Wall Street, with small businesses feeling the drastic impact on receivables and about to drown due to crushing inflation," Andrew Crapuchettes, RedBalloon CEO, said.
Key FEI Data Points:
Additionally, 81.4% of these business owners say their supplier prices have actually increased in the last 30 days, which is up from 76% in October.
To compensate for this, small business owners are forced to work more hours, since they can’t afford to hire new talent or outsource the work. 59% say they’re having to work more hours than last year, with over half saying their workweek exceeds 50 hours.
And why all the extra hours? 56.4% say because of the “difficult economy.”
A sampling of open-ended verbatim answers to “How is Inflation Impacting Your Business?”
“Inflation is currently destroying our small business. In our 27 years of success, we have never seen a loss as the past 2 years.”
“I have received notification that a large percentage of my goods will be going up in price at the start of the year. The increases range from 3.5% to 15%.”
“Our costs of running our business have doubled, and in same cases tripled over the last two plus years.”
“I own a manufacturing company, and inflation has closed over 40% of my industry.”
“High interest rates and inflation in materials prices have caused several planned development, housing and building projects to become infeasible. They are currently on hold with no timeframe for restarting.”
“Actual inflation is far higher than the CPI indicates.”
The survey underscores the struggles of Main Street caused by what some are calling the burdens of "Bidenomics," and sheds light on the disparity between government reports and the boot-on-the-ground perspective of these entrepreneurs.
The Freedom Economy Index surveyed a universe of over 70,000 small business owners throughout the United States, fielding the questionnaire from November 30 to December 5, with 682 respondents. The survey has a margin of error of +/-4.0% at the 95% confidence level.