US Small Business Confidence Index Down 2.1p in February... Worsening for 3 Consecutive Months
Summary
- According to NFIB, the US small business confidence index fell by 2.1 points in February, showing a decline for the third consecutive month.
- The report stated that due to the Trump administration's unstable trade policies and tariff impacts, the percentage of small businesses raising prices has significantly increased.
- It added that as uncertainty about the future economy grows, small businesses are finding it difficult to make future plans.
Uncertainty Index at 104, Second Highest Ever
Price Increases Due to Tariff Impact, Future Planning Difficult Due to Uncertainty
The US small business confidence index fell for the third consecutive month in February as concerns over President Trump's trade policies grew.
On the 11th (local time), the National Federation of Independent Business (NFIB) announced that the small business optimism index recorded 100.7, down 2.1 points in February. This reflects declines in consumer and business confidence, as well as the stock market. The NFIB's uncertainty index rose 4 points to 104, marking the second highest figure on record.
NFIB Chief Economist Bill Dunkelberg explained, "Uncertainty among small businesses is high and increasing." Small business owners in the US tend to strongly support the Republican party.
According to Reuters, the Trump administration's unstable trade policies, including flip-flopping tariff policies on Canada and Mexico, are causing anxiety among businesses. Economists point out that such uncertainty makes it difficult for businesses to plan for the future.
Consumers already expect higher inflation next year and beyond due to tariffs Trump has imposed, tariffs he suspended after threatening to impose, and tariffs he is currently threatening to impose.
According to the NFIB survey, the proportion of businesses that raised their average selling prices due to tariff impacts surged by 10 points last month to 32%, the largest increase since April 2021.
Price increases were particularly common in finance, wholesale, agriculture, retail, construction, and manufacturing sectors.
The proportion of businesses planning price increases rose by 3 points to 29%, also the highest figure in 11 months.
The percentage of business owners expecting the economy to improve dropped 10 points to 37%. The response that now is a good time to expand business fell to 12%, the largest drop since April 2020.
Kim Jung-a, Contributing Writer kja@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
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