Small businesses report record monthly surge in price increases as inflation pressure mounts

Core Insights - The share of small businesses raising their selling prices reached an all-time high in November, driven by ongoing inflationary pressures [1][2] - The net percentage of small business owners reporting price increases rose to 34%, the highest since March 2023, significantly above the monthly average of 13% [2] - Inflation remains a critical issue for small businesses, ranking second in importance after labor quality concerns [5][8] Inflation Impact - Year-over-year price growth is approximately 3%, exceeding the Federal Reserve's target of 2% [2] - Inflation concerns among small business owners increased by 3 points, indicating a growing significance of this issue [5] - In November 2024, inflation was cited as the most important problem by 20% of small business owners, narrowly surpassing labor quality at 19% [8] Business Optimism and Sales Expectations - The NFIB Small Business Optimism Index rose by 0.8 points to 99, remaining above the 52-year average of 98, with six of the ten components increasing [11] - A net 30% of small businesses plan to increase prices in the next three months, reflecting confidence in sales growth [8] - The net percentage of owners expecting higher real sales volumes increased by 9 points from October to 15% [13] Profitability Factors - Among small business owners reporting higher profits, 51% attributed this to increased sales volume, while 18% cited seasonal changes and 12% pointed to higher selling prices [8] - For those reporting lower profits, 27% blamed weaker sales, 16% cited rising material costs, and 12% mentioned labor costs [11]