Economy

US Small-Business Optimism Drops on Outlook for Economy, Credit

Published

1 year ago

October 10, 2023

Businesses in the Queens borough of New York. , Bloomberg

(Bloomberg) — US small-business optimism dropped to a four-month low in September, reflecting worsening expectations for the economy and credit conditions.

A National Federation of Independent Business index of sentiment fell by half a point to 90.8 last month, the group said Tuesday. A net 43% of small-business owners saw business conditions deteriorating in the next six months, the most since May.

Small firms were also increasingly pessimistic about credit availability. The share of survey respondents saying it was harder to get a loan compared to three months ago increased to 8% on net — the most since March, when Silicon Valley Bank collapsed.

The Federal Reserve has hiked interest rates to the highest level since the early 2000s to tame persistent inflation. Officials have reiterated the need to keep borrowing costs higher for longer, triggering a recent selloff in the bond market.

Here’s what else small businesses had to say about credit conditions:

One in 10 firms on net expect worse credit conditions in the next three months, matching the highest share since 2012.
About a quarter of borrowers on net said they now pay a higher interest rate compared to three months ago, matching the highest share since 2006.
Small-business owners said they paid an average interest rate of 9.8% on short-term loans, the highest in data back to 2013.

Respondents to the NFIB survey continued to rank inflation and labor quality among their single-most important problems. The share of small businesses who raised selling prices rose for a second month in September, marking the first back-to-back increase since early 2022.

“Owners remain pessimistic about future business conditions, which has contributed to the low optimism they have regarding the economy,” said NFIB Chief Economist Bill Dunkelberg. “The bottom line is being squeezed, leaving owners few options beyond raising selling prices for financial relief.”

Hiring struggles were evident as well. Firms reporting job openings that were hard to fill rose by the most since the start of the year, to 43%. Those who said they had few or no qualified applicants for vacancies rose to 57%, the most in a year.

(Adds graphic, tout to survey)

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Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

12 hours ago

October 17, 2024

Anne Joseph

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

1 day ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

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Economy

Statistics Canada says manufacturing sales fell 1.3% to $69.4B in August

Published

2 days ago

October 16, 2024

Anne Joseph

OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.

The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.

The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.

Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.

Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.

Overall manufacturing sales in constant dollars fell 0.8 per cent in August.

This report by The Canadian Press was first published Oct. 16, 2024.

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