Ongoing inflation and supply chain concerns, a set of updates from the Small Business Administration, and reports on pay gaps and mobility risks in the workforce are among the top business news items from the past week.
Inflationary trends are showing no signs of letting up. The Consumer Price Index for February was up 7.9 percent on an annual basis, while wholesale inflation was up 10 percent. Treasury Secretary Janet Yellen acknowledged that 12-month figures are likely to remain “very uncomfortably high” during 2022, especially as the war in Ukraine creates uncertainty in several markets. The Federal Reserve has made the first increase to its key interest rate in four years in an effort to rein in inflation, lifting it a quarter point; policymakers are forecasting six more rate hikes this year.
Western sanctions against Russia are further complicating existing supply chain issues. The United States and its allies have imposed strict restrictions on exports of advanced technology to the nation, and disruptions caused by the war in Ukraine are creating new shipping complications. The National Federation of Independent Business finds that more than half of small business owners are experiencing supply chain disruptions, with four in five of these business owners saying the problems are having a detrimental impact on their sales or opportunities.
The Small Business Administration announced a number of updates in the past week, including:
- An extension of the deferment period for repayment of COVID Economic Injury Disaster Loans
- The launch of Building a Better America: A Small Business Resource Community, which aims to provide entrepreneurs with critical training and resources
- The announcement of National Small Business Week, which will run from May 1-7
Falling consumer, retail sentiments
The University of Michigan’s consumer sentiment report finds a sharp dip in Americans’ economic perceptions amid higher fuel prices and falling inflation-adjusted incomes, though consumers remain optimistic about the job market. Economists have been signaling greater recession risks due to these pressures as well as global uncertainty created by the war in Ukraine and lingering COVID-19 pandemic.
These concerns are reflected in recent retail reports, which previously showed robust sales despite inflation. Retail sales in February were up by just 0.3 percent, down considerably from January’s annual gain of 4.9 percent. The National Retail Federation is predicting that retail sales will grow at a pace of 6 to 8 percent this year, slower than in 2021 but above pre-pandemic levels.
Gender pay gaps and IT mobility
A Labor Department analysis highlights a persistent gender-based earnings gap, with women overrepresented in low-wage jobs. A separate report by the company Payscale finds the gap was more pronounced among women who quit due to inadequate child care options.
Another survey by the global analytics firm Gartner highlights the elevated turnover risk among IT employees. The poll shows that only 29 percent of IT workers have a high intent to remain with their current employer.