Small Business Sentiment Down, Consumer Prices Rise
According to the National Association of Manufacturers’ (NAM) Monday Economic Report for this week, small business sentiment dropped to its lowest level since May 2023, largely due to inflation concerns. The sentiment index has remained below the 50-year average for 26 consecutive months. Inflation surpassed labor quality as the top issues and has become the primary concern for small business owners, with 23% identifying it as their most significant business operation challenge.
Consumer prices rose 0.4% in February, following a 0.3% increase in January. The increase was the highest monthly increase since September 2023. Prices are up 3.2% over the past 12 months.
Price increases in February were driven significantly by rising shelter and gasoline prices – accounting for more than 60% of the monthly increase. Driven by high gas prices, energy prices rose 2.3%; however, energy prices are down 1.9% YoY. Food prices, conversely, are up 2.2% YoY, with the food at home index rising just 1% and the food away from home index jumping 4.5%.
Core consumer prices, which exclude food and energy, also rose 0.4% during February, matching the 0.4% rise in January. This rise outpaced the 0.3% consensus expectations for the month with core prices up 3.8% YoY.