More small businesses are hiking prices for their goods and services than at any point since 1974, showing just how widespread inflation is.
Raising prices has gotten vastly more commonplace over the last year or so, and it’s been decades since we’ve seen such widespread inflation, the chart below shows. In January, a net 61% of small businesses reported increasing prices over the last three months, up from 57% in December, according to a survey by the National Federation of Independent Business, a small business trade group. The last time the group saw more than that was in the fourth quarter of 1974, when it was at a record 66.7%. (The NFIB had been collecting data only quarterly until 1986.)
“More small business owners started the New Year raising prices in an attempt to pass on higher inventory, supplies, and labor costs,” NFIB Chief Economist Bill Dunkelberg said in a statement.
More price increases are coming, though there’s a glimmer of hope. A net 47% of small businesses, down from a recent peak of 54% in November, are planning to raise prices over the next three months, NFIB said.
Inflation is at the highest level in nearly 40 years because supply and labor shortages are making it harder to meet the increased demand from people with extra savings and government stimulus money to spend. And the soaring prices are taking a toll on consumers: The latest University of Michigan survey showed an index of consumer sentiment sank in February to its lowest level in a decade.
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