Interestingly, whilst the NFIB press release notes the sudden and dramatic changing in costs from tariffs, inflation is in third place on small businesses list of concerns. Excerpts from the press release (in full here):
- “Very few small businesses export their goods and services, but millions acquire imported goods as inputs to their operations and those supply chains are currently at risk. Tarriff policy is suddenly and dramatically changing relative prices (costs), and relative prices drive all decisions. Uncertainly remains elevated and thus caution clouds spending, hiring, and investing decisions.”
- “While the quality of the available labor force remains the top problem, taxes are close behind, and for over 51 years have received the most votes for single most important business problem. Renewal of the Tax Cuts and Jobs Act (TCJA) remains a major source of uncertainty. Nearly 1 in 10 owners view government regulations and red tape as their top business problem, a form of taxation in which the government directs the expenditure of resources for compliance.”
- “Inflation continues to fade in the list of concerns (now ranking third). Actual inflation is low, although not quite at the Fed’s goal of 2 percent. But prices are still rising, and what owners want to see is a reversal of the cumulative 20 percent increase in prices under the Biden administration. History tells us that this has always required a slowdown in the economy. Massive improvements in productivity, which reduce production costs (especially in services), can trigger lower selling prices. This is a far more attractive path to achieving their goal. However, this will require substantial investment. Capital spending has been anemic since 2020, and capital spending plans are at the lowest level seen since 2020.”