That’s the share of small business owners who reported raising sales prices in June, the most since January 1981 and a palpable sign that rising U.S. inflation is real.
A monthly survey by the National Federation of Independent Business (NFIB) showed the net share of business owners hiking prices (after subtracting the number that lowered prices) has shot up as the economy has recovered from the COVID-19 pandemic. It jumped from 40% in May and had been in the low double-digits pre-pandemic, the nonprofit trade group said Tuesday.
The swift reopening of the U.S. economy, fueled by COVID-19 vaccine rollouts earlier this year, has triggered a burst of inflation. Consumer prices increased 5.4% in the 12 months through June, the largest gain since 2008, the Bureau of Labor Statistics reported Tuesday, showing surging demand is overwhelming supply amid shortages and bottlenecks.
“The incidence of price hikes on Main Street is clearly on the rise as owners pass on rising labor and operating costs to their customers,” the NFIB said in its release.
Although Federal Reserve Chairman Jerome Powell has repeatedly said the surge in inflation is temporary—a symptom of the unusual circumstances of the pandemic—some economists are questioning whether prices will stay higher longer than Powell expects. The net share of businesses planning to raise prices over the next three months rose to 44%, up from 43% in May and the highest since 1979.