Former investment banker Carol Ross and Grover Norquist, president of the American Tax Reform Institute, evaluated President Biden’s economic policies on “The Evening Edit.”
Small business owners have been hit hard over the past three years by rising prices and a critical labor shortage.
Now they face a new hurdle: rising rents.
A new study released by the Bank of America Research Institute found that many Small business owners They are still battling high inflation, especially in terms of rent.
In fact, there is evidence that rent inflation for small businesses is outpacing that for U.S. households: Through May, the average monthly rent as a percentage of total payments for small businesses was 9.1%, up significantly from an average of 5.9% in 2019. By comparison, personal rent for Americans rose 5.3% in May.
U.S. home prices hit record high again in April
Rent increases have been felt most hard in Western cities such as Las Vegas, where the average share of rent in May was more than double the national average, according to Bank of America.
A hiring wanted sign hangs in the storefront window of Kay Cameron Jewelers on Sept. 21, 2021, in Sayville, New York. (Steve Forst/Newsday RM via Getty Images)
“Rent payments per customer track closely with the nonresidential property rent component of the Producer Price Index, suggesting that these increases are primarily due to inflation rather than small businesses upgrading to larger or better space,” the report said.
Skyrocketing rents have led to more small businesses falling behind on payments, according to another survey published by business networking platform Alignable: About 43% of U.S. small business renters were unable to pay their rent in full and on time in April, the highest delinquency rate since March 2021, when rent nonpayments peaked. COVID-19 pandemicWhen it reaches 49%.
Fed keeps interest rates at 23-year high, expected to cut only once this year
About 58% of small businesses reported that their rent had increased in the past six months.
Bank of America’s data came after the National Federation of Independent Business (NFIB), a Tennessee-based group of small business owners, reported that its Small Business Optimism Index rose in May to its highest level since November 2020. But optimism remains well below its historical average.
Small business owners are facing a new hurdle: rising rent costs. (Lindsay Nicholson/UCG/Universal Images Group via Getty Images)
Nearly a quarter of business owners identify inflation as the most significant issue in their business operations due to rising labor and input costs.
“For the 29th consecutive month, small business owners have a historically low outlook for optimism, and their views about the future business environment are at their worst level in the past 50 years,” said NFIB Chief Economist Bill Dunkelberg. “Small business owners need relief. Inflation is not easing There isn’t much on Main Street.”
Click here to get FOX Business on the go
Inflation has fallen sharply from a peak of 9.1%, but prices remain above the Fed’s 2% target. The latest government data showed the Consumer Price Index at Increased 3.3% in May.
As a result, about 25% of small business owners reported raising prices to offset the effects of high inflation, which remained unchanged from April, while 12% reported lowering their average selling prices.
