According to the National Association of Manufacturers’ (NAM) Monday Economic Report for this week, the Index of Consumer Sentiment declined from 62.8 in February to 59.7 in March, the lowest reading since October 2011. Americans felt less upbeat in their current assessments and their outlook for the coming months. According to the release, confidence was lower due to falling inflation-adjusted incomes and rising fuel prices.
Likewise, the National Federation of Independent Business reported that the Small Business Optimism Index declined from 97.1 in January to 95.7 in February, a 13-month low. The headline index has drifted lower for the most part since June 2021 (102.5). Supply chain disruptions, workforce shortages and inflation continue to challenge small business owners. Small businesses suggesting that the next three months were a “good time to expand” edged down from 9% to 8%, a 12-month low, and sales and earnings expectations remained challenged.
Respondents cited inflation as the “single most important problem,” followed closely by difficulties in obtaining enough qualified labor. In February, the net percentage of respondents reporting higher prices today than three months ago jumped from 61% to a record 68%.