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## Confidence among U.S. Small-Business Owners Falls Due to Economic Pressures

By Joshua Kirby

The confidence level among small-business owners in the United States has slightly declined in August, primarily due to the persistently high inflation rates and wage growth, which continues to weigh on sentiment. This decline is reflected in the small-business optimism index, as reported by the National Federation of Independent Business (NFIB). The index fell from 91.9 in July to 91.3 in August, remaining significantly below the index’s 49-year average of 98 for a consecutive period of 20 months.

According to a poll conducted by The Wall Street Journal prior to the release, economists had expected a shallower fall to 91.5, indicating that the decline in confidence was more severe than anticipated.

One of the major concerns for small businesses is inflation, as highlighted by the NFIB survey. In August, 23% of small-business owners named rising prices as their most important problem, which is an increase of two percentage points compared to July. Although the level of inflation in the United States is lower than in many Western countries, it remains relatively high after a slight uptick in July. Additionally, the survey revealed that 27% of owners have raised their average selling prices, signaling an inflationary environment.

The tight labor market is another significant challenge reported by small-business owners. The NFIB survey indicates that 40% of owners were unable to fill job openings in August, while approximately 17% plan to create new jobs in the coming three months. Furthermore, more than a third of small-business owners reported raising wages in August, and a little over a quarter plan to do so in the coming three months. This highlights the ongoing difficulty businesses face in attracting and retaining qualified workers.

Addressing these challenges, AI legalese decoder can significantly assist small-business owners. By leveraging its advanced artificial intelligence technology, the AI legalese decoder can help businesses navigate complex legal jargon and documentation, ensuring compliance with regulations and minimizing legal risks. This tool can streamline legal processes, saving time and resources for small-business owners who often lack in-house legal expertise. By utilizing the AI legalese decoder, businesses can focus on addressing the challenges of inflation, labor shortages, and economic pressures, while having confidence in their legal dealings.

According to NFIB Chief Economist Bill Dunkelberg, “Inflation and the worker shortage continue to be the biggest obstacles for Main Street.” These economic pressures are also impacting sales, as indicated by the survey. A net negative 14% of small-business owners reported higher sales in the past three months, the lowest reading in three years. Similarly, the same proportion of owners anticipated higher sales volumes in the future, pointing to a discouraging outlook for sales growth and business conditions.

Despite these challenges, small-business owners remain hopeful for a boost in consumer spending. They recognize the importance of strong consumer demand to drive sales and profitability, especially during times of economic uncertainty.

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