Inflation Report Primer: Small Businesses Have Abandoned Hopes for a 2024 Rate Cut

A new survey of 80,000 small businesses in the Freedom Economy by RedBalloon and PublicSquare found that 70% of small business owners now believe the Fed will either keep rates unchanged (33.4%) in 2024 or raise them this year (37.8%).   

And 64% now strongly believe the US economy is headed into stagflation - the situation where prices continue to rise while the economy fails to grow or even slips into recession. 

“Regardless of the messaging coming out of the White House, Main Street is laboring under high levels of inflation and high interest rates – and it doesn’t look like there is any relief on the horizon.” said Andrew Crapuchettes, RedBalloon CEO and longtime pioneer of developing labor market analytics for strategic business planning. 

“It cannot be emphasized enough that these small business owners are on the frontlines of the US economy. They’re in hand-to-hand combat for survival against inflation and a sagging economy. And because they feel what’s happening every day, their responses to the Freedom Economy survey have been spot-on month-after-month, accurately predicting the turns and twists of this post-COVID economy.”

Yes - Strongly	63.8%
Yes - Maybe	23.6%
Not Sure	9.4%
No	0.3%
Other	2.9%

Lower rates significantly	3.4%
Lower rates slightly	13.6%
Keep rates unchanged	33.4%
Raise rates	37.8%
Other	11.9%

In the May version of the survey, employers answered where inflation is hurting them and their families the most. Respondents rated consumer categories on a scale of 1-5, with 5 being where “inflation has hit them and their family the hardest.” Here’s how respondents assigned level-5 to the various categories.

Food	80.1%
Gas Prices	67.2%
Dining Out	48.0%
Utilities	39.2%
Housing	37.3%
Auto (buy/maintain)	36.5%
Insurance	32.2%
Travel	28.8%
Healthcare	24.1%
Clothing	15.4%

Methodology: 

The May 2024 Freedom Economy Index survey sampled opinions from a universe of over 80,000 small business owners from throughout the United States. The survey fielded from April 30 to May 10, with 754 respondents and a 4% margin of error at the 95% confidence level.