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Small Business Uncertainty Hits Record High Amid Economic and Election Concerns
Small business owners are facing unprecedented levels of uncertainty, with the economy emerging as their top concern. This anxiety is particularly pronounced in key battleground states like Arizona, where the upcoming election could sway voices and outcomes.
While Wall Street appears to be thriving, Main Street is grappling with growing insecurity. Recent polls indicate that the race between former President Donald Trump and Vice President Kamala Harris remains a dead heat, adding to the unease. The National Federation of Independent Business (NFIB) reported a sharp 11-point increase in its uncertainty index for September, marking the highest level on record.
Small Business Owners Hesitate to Invest
NFIB Chief Economist Bill Dunkelberg noted that uncertainty is causing business owners to delay investments in capital expenditures and inventory. “Inflation and financing costs continue to pressure their bottom lines,” Dunkelberg explained. “While some hope for a profitable holiday season, many Main Street owners are questioning whether economic conditions will improve in the near future.”
Shawn Cole, co-founder of Cowen Partners Executive Search, echoed this sentiment, calling the current situation a “stalemate.” “This prolonged uncertainty is incredibly frustrating,” Cole told Fox Business. “Inflation remains the top issue, and broader economic questions, including the upcoming election, leave no clear path forward.”
Inflation and Election Fears Weigh Heavily
Small business owners cite inflation as their most pressing issue, with rising costs affecting everything from supplies to wages. Ted Jenkin, co-founder of Oxygen Financial, explained the challenge: “Inflation may be slowing, but prices aren’t decreasing—they’re just rising more slowly. When you combine that with increasing wage pressures, it’s a real struggle for small business owners to manage profitability.”
Jenkin also highlighted the role of election-related concerns in driving anxiety. “Democrats talk about supporting small businesses, but rising health insurance costs and potential tax increases create a gray cloud over the sector,” he said.
Hurricane Milton Adds to Florida’s Struggles
In Florida, small businesses are already reeling from the devastation of Hurricane Helene, with Hurricane Milton’s approach compounding their challenges. Patrick Barnhill, owner of Specialistid.com, described the situation as “feeling like a third-world country.” He emphasized that the challenges extend beyond inflation: “We’re fighting to keep operations afloat in an environment that feels increasingly unstable.”
NFIB Optimism Index Remains Low
The NFIB’s optimism index fell slightly by 0.3 points to 91.5 in September, marking the 33rd consecutive month below the 50-year average of 98. This persistent pessimism reflects the ongoing struggles small businesses face in an uncertain economic and political climate.
Ashley Lacer, owner and CEO of the Michelle Mae clothing brand, shared her experience of navigating inflation. “We’re constantly walking a tightrope,” she said. “Predicting costs and planning for the future has become incredibly difficult. Every decision carries more weight, and this uncertainty is a daily challenge.”
Looking Ahead
As the 2024 election approaches, small business owners are closely watching for policies that could impact their operations. With inflation, rising costs, and election uncertainty weighing heavily, many are struggling to maintain optimism in an increasingly unstable environment.
This story was updated on November 4, 2024.
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