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Traditional "Problems" Resurfacing For Businesses As Inflation Abates

US DATA

The January NFIB small business survey showed a little bit more optimism on the economy vs December (90.3 vs 91.0 expected and 89.8 prior).

  • Though the % expecting higher sales diminished (to a five month low -14%, vs -10% prior), demand problems don't appear to be top of mind per the survey, which also suggests that inflation concerns are also abating.
  • "Inflation" as the "single most important problem" cited by small business owners in the NFIB survey continues to fall in prevalence, with "quality of labor", "taxes" and "financial and interest rates" rising in importance.
  • The responses are indicative of a normalizing post-pandemic economy, in which taxes, demand, and labor quality are more prevalent issues - and suggestive of a "soft landing" scenario in which financial and consumer demand problems are seen fairly limited, while inflation diminishes.

Source: NFIB, BBG, MNI

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