U.S. Small Business Confidence Rises Slightly in Dec due to High Inflation

A survey showed on Tuesday that the U.S. small business confidence increased modestly in December amid growing concerns about inflation and worker shortages.

The National Federation of Independent Business said its Small Business Optimism Index slightly rose at 0.5 point to 98.9 December. Twenty-two percent of owners said that the inflation was the single most important problem for operations, compared to 18% last November.

The economy is experiencing a period of high inflation as the COVID-19 pandemic snarls supply chains. But there are tentative signs that supply bottlenecks are starting to ease, with an Institute for Supply Management survey last week showing manufacturers reporting improved supplier deliveries in December. Economists and Federal Reserve officials expect inflation will start subsiding this year, Reuters reported.

Even as inflation concerns mounted last month, the NFIB survey showed the share of owners raising average selling prices decreased two points to 57%. Price hikes were the most frequent in wholesale, construction and retail industries.

The proportion of businesses planing to raise prices fell five points to 49%.