Consumer pessimism on the economy, shifts in the energy market, proposed updates to Small Business Administration programs, and recovery in business travel are among the top business news items from the past week.
Price pressures are supplanting concerns about the COVID-19 pandemic, with a Gallup poll in March finding 17 percent citing inflation or the high cost of living as the most important problem facing the United States today – up seven points from February. The Federal Reserve’s preferred inflationary measure shows a 6.4 percent annual increase in prices through February, with consumer spending growth falling to 0.2 percent in that month.
A survey from the Associated Press and NORC Center for Public Affairs Research finds a majority of respondents giving the Biden administration poor marks on their handling of the economy, with the spike in gas prices causing the most concern about household finances.
Eighty-five percent of small business owners in a U.S. Chamber of Commerce survey said they are concerned about inflation, with one in three naming it as their biggest challenge. However, the majority (61 percent) said their company remains in good health.
The spike in gas prices is raising greater energy concerns among Americans, with 47 percent of respondents in a recent Gallup poll saying they worry about the availability and affordability of energy. It has also led to increased investor interest in oil and gas, a plan to release oil from the Strategic Petroleum Reserve, and efforts to increase U.S. exports of liquefied natural gas to Europe.
While the disruptions in the oil market have also put a focus on renewable energy, costs for these projects have gone up due to the war in Ukraine as well as ongoing factors like supply chain disruptions and higher prices for raw materials. An NPR feature also looks at how misinformation has been hampering renewable energy developments in the U.S.
SBA and Congress
President Joe Biden’s budget proposal seeks a major funding increase for the Small Business Administration, allocating $914 million toward initiatives such as improving capital access, strengthening domestic manufacturing, and assisting underserved entrepreneurs. Meanwhile, bills under consideration in Congress would increase access to entrepreneurial training for incarcerated people and those with criminal records.
The SBA has also extended its Community Advantage program to 2024 and made several other changes to the program, including accepting new lender applications and increasing the lending cap.
Business travel has been on the rise in recent weeks, with small and medium-sized companies leading the way. However, this travel remains considerably lower than pre-pandemic levels, with some companies looking to permanently reduce their travel budgets.