Inflation is the Number One Concern for Small Businesses According to a Metlife Survey

According to the MetLife study, which was conducted in late January, 85 percent of small company owners are worried about the consequences of inflation on their firm, up from 74 percent the previous quarter. Almost half of small company owners, 44 percent, are worried about rising pricing.

Furthermore, 76 percent of those polled indicated they are finding it difficult to handle increasing expenses due to inflation, and around three out of every four owners claimed higher prices had had a substantial impact on their firms in the last year.

Consumer prices grew 7.5 percent in the year ended in January, the greatest rate of inflation in four decades and a significant half-point rise over December's figure. Prices for a broad variety of goods increased, including housing, automobiles, and food. President Joe Biden's popularity ratings have suffered as a result of inflation, as has support for his plan.

Inflation has not only reached record highs, but it has also been increasing at a fast rate. When the Chamber conducted the same study less than a year ago, just 16% of small company owners named inflation as a major worry.

Nearly 70% of small firms have had to increase their pricing as a result of increasing prices, while 41% of owners have had to downsize by reducing employees in order to cope.

The nation has also been beset by supply chain snarls. Ships were stranded outside ports as a result of the epidemic, manufacturers struggled to find and retain personnel, and truck drivers were in great demand. Following inflation, small company owners ranked supply chain issues as their second most pressing worry.

Moreover, a quarter of small company owners polled said supply chain issues are their main fear, while a slightly smaller proportion, 24 percent, said COVID-19 is their greatest apprehension — both of which were swamped by the 33 percent who said inflation was their top apprehension.

The epidemic has impacted the supply chain for the majority of small enterprises (63 percent).

The Federal Reserve intends to raise interest rates for the first time in years during the Federal Open Market Committee's next meeting later this month. In reaction to whirling inflation, the Fed is poised to behave more hawkishly, and rates are projected to rise multiple times this year.

Raising interest rates will have repercussions across the economy, including higher mortgage rates and even some volatility in the stock market. Small company owners are worried about the expected rises, with 70% expressing worry about how the changes would affect their operations. Of the 70 percent, 29 percent are extremely worried about increasing interest rates.

On Wednesday and Thursday, Fed Chairman Jerome Powell testified before Congress. He said that, despite economic worries raised by Russia's invasion of Ukraine, the central bank is planning to raise interest rates in two weeks.

"Our monetary policy has been and will continue to respond to the developing economic situation," he told legislators. "With inflation well over 2% and a healthy labor market, we scaled off our net asset purchases. We anticipate that raising the target range for the federal funds rate at our meeting later this month would be appropriate."