Weekly Charts
Each Thursday, the MCP Research team shares two charts we are currently looking at that bring insights into the current state of the markets. This week—small business sentiment.
The NFIB Small Business Survey Optimism Index broke above 100 for the month of June, implying strength across the small business segment in the U.S. The majority of respondents though still see general business conditions deteriorating over the next six months, this seems to be attributable to (1) rising cost pressures and (2) a difficult labor market.
We think the blockages in the labor market will be temporary. As the spread of the virus subsides, child-care centers reopen, and more and more states are opting out of the weekly unemployment supplements, we should begin to see these job openings fill.
We aren’t so sure about the rising cost pressures. What stands out to us is the 47% of firms that plan to increase prices in the next 3 months–the highest reading since 1981. This seems to conflict with the Federal Reserve’s staunch position on transitory inflation. According to the report, “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.” Maybe you haven’t seen higher prices at the checkout yet…or maybe you just haven’t noticed?
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