Here we go again…
When energy prices rise it causes other consumers and business products to increase. Gas Price’ Rise Causing More Inflation. It is obvious that inflation is closely tied with energy. Bidenomics is really not working well for more Americans. People may have seen their paychecks rise, but the increase has been used up by higher taxes, higher prices, and more fees.
This headline from Fox Business should scare all of us:
Small business owners and consumers are both already stretched to the limit. Consumer debt has already risen to historic levels. The US Government has been pushing money into the system through low-interest loans, tax credits, employment credits, and grants.
The strategy does not appear to be working.
In August, the Consumer Price Index for All Urban Consumers increased 0.6 percent, seasonally adjusted, and rose 3.7 percent over the last 12 months, not seasonally adjusted.
The index for all items less food and energy increased 0.3 percent in August (SA); up 4.3 percent over the year (NSA).
The Consumer Debt Timebomb
American household debt hit a record $16.9 trillion at the end of 2022, up $2.75 trillion since 2019, according to the Federal Reserve. This is on top of the borrowing by our government during the Covid-19 emergency. American consumers are in more debt than any time in the history of the United States.
Americans owe $986 billion on credit cards, surpassing the pre-pandemic high of $927 billion. We owe $11.92 trillion on mortgages, $1.55 trillion on vehicle loans and $1.60 trillion for student loans.
The rise of inflation will only lead to larger problems.
Inflation Puts Pressure on Small Business
Consumers are not the only ones feeling pressure. Small business is feeling pressure in many ways. They are feeling the pressure of new government regulations, higher food prices, higher supply prices, dwindling customer pools, technology changes, and other areas of concern. Marketing a brand or shop has increased in cost dramatically due to wage increases.
“Half (50%) of small businesses now say inflation is the top challenge facing the small business community. This marks the fifth consecutive quarter of increasing concern over inflation and represents a dramatic 31-point increase since this time last year (when only 19% said inflation was a top challenge).” – US Chamber
Other issues include:
- Supply Chain Disruptions
- Employee shortages
- Increased corporate competitors
So many small business owners that received assistance through the SBA EIDL program find themselves seeking additional funds to improve their business model.
Do you own a small business in the United States? What are some of the challenges your are seeing?