Just 1 in 5 small-business owners feels good about the health of the economy right now, according to the latest small business index from MetLife and the U.S. Chamber of Commerce.
That’s down from last quarter, despite the fact that the majority said their own business is doing well. It’s connected, in a way, to what Washington Post columnist Catherine Rampell said Tuesday on “Marketplace.” There’s an apparent disconnect between the data, which is telling us how strong the job market and the U.S. economy are, and how people feel about the economy and their own finances, which is not so good.
When asked how he feels about the economy, Fiore Tedesco III, chef and owner at L’Oca d’Oro in Austin, Texas, began his response with an optimistic tone.
“My first instinct is to say, I feel fine about it. Because people are coming into the restaurant. We are busy,” he said. But — “a big part of that economy is, what does it cost to live in this country [or] in this world? And the cost of labor, because of the cost of living and the cost of goods, has gone up so much, it’s hard to keep up.”
His optimism faded as he spoke.
“I would say as an overall, um, I don’t feel great about it. I feel like it’s … not a sustainable economy,” he said.
It’s not sustainable because all of his costs, like food and labor, are rising, and Tedesco said he’s “scared to raise prices.” He wants to stay busy and he doesn’t want to risk driving customers away. However, he can’t keep absorbing all the rising costs either.
Many business owners are feeling some version of this, said Tom Sullivan of the U.S. Chamber of Commerce.
“We have seen five straight quarters where inflation is the highest concern by small business,” he said. One way that’s bearing out? “There was a sharp drop in planned investments by small business.”
Many are putting off buying new equipment, renovating storefronts and other upkeep tasks. That’s true for Emily Gloekler, who owns a small store and event space in Chicago called One Strange Bird.
Her business is doing well. But rising interest rates and the banking turmoil combined with high-profile layoffs have made her nervous.
“I would love to open up another shop. But it’s always just one of those scary risks to take, especially when you’re viewing the lending rates and whether you’re going to use personal finances or take a loan,” Gloekler said.
So, she’s holding off and figuring she’ll see where the economy is in a year or so.
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