Inflation has slowed from its 40-year peak a year ago to 4.9% in the 12 months ended in April. ![]() The share of small business owners expecting better business conditions in the future declined in May while the share reporting that inflation “was their single most important problem in operating their business” increased. The survey showed that overall small business optimism improved in May, though it remained below its historical average for the 17th month in a row. “Supply chain disruptions and labor shortages will continue to limit the ability of many small firms to meet the demand for their products and services, while less severe than last year’s experience.” “Overall, small business owners are expressing concerns for future business conditions,” Bill Dunkelberg, NFIB’s chief economist, said in a release. Officials look at a wide range of sentiment surveys to make the determination such as another recent survey that showed that consumers’ near-term inflation expectations fell in May to their lowest level in two years. If they have become used to a higher level of inflation, it could be extremely hard to bring down, eroding Americans’ living standards. The Fed keeps a close eye on inflation expectations to know whether or not US consumers have become used to a certain level of inflation. If even more business owners become concerned about inflation in the coming months, then that might be a problem for the Federal Reserve - which is trying to tamp down inflation still running well above the central bank’s 2% target, even though price increases have slowed in the past year. ![]() A greater number of small businesses are worried about inflation and future business conditions, according to a survey released Tuesday by the National Federation of Independent Business.
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