NEW YORK (AP) – Inflation remains the main concern for small businesses, a new survey shows, as small businesses' optimism declined in February.
The National Federation of Independent Business' optimism index fell to 89.4 in February. It has remained below the 50-year average of 98 for 26 consecutive months. 23% of small business owners say inflation is their biggest problem, up 3 percentage points from January, when the quality of workers was their main concern.
Inflation remains high. The Labor Department said last week that prices rose 0.4% from January to February, up from a 0.3% pace the previous month. Compared to the same month last year, consumer prices rose 3.2% last month, slightly higher than January.
So-called “core” prices, which exclude food and energy prices, also rose 0.4% from January to February. That's faster than needed to bring inflation down to the Fed's 2% goal. Core inflation is being closely monitored to get a read on where inflation is likely to go.
Small business owners are cutting back on spending as they battle inflation. Fifty-four percent of owners reported capital expenditures in the past six months, down five points from January. Of those spending, 35% reported spending on new equipment, 23% acquired a vehicle, and 15% improved or expanded their equipment.
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