Small business owners breathed a collective sigh of relief last week after the Federal Reserve’s widely anticipated decision to cut interest rates, with new data showing hopes that business owners will take advantage of the increased capital. It shows that
According to CNBC and SurveyMonkey’s Q3 Small Business Survey, business owners say lower interest rates will lead to more investment, business expansion and increased inventory. The poll was conducted among a national sample of 2,276 self-identified small business owners over the age of 18 online from September 3rd to September 9th, ahead of the Fed meeting where interest rates are expected to be cut.
Main Street is watching interest rates closely. Interest rates on short-term loans in August were 9.5%, up from 7.6% in January 2023, according to data from the National Federation of Independent Business, a small business lobbying group. Additionally, 60% of owners were not interested in renting at the moment due to high interest rates.
Holly Wade, director of the NFIB Research Center, said lower fees will allow business owners to allocate resources to other areas of their business, such as remaining competitive in hiring.
“This will be a huge benefit for us as we look at whether we can be more competitive in terms of wages and benefits in this space and alleviate some of the cost pressures that we’ve been dealing with for the last three years or so,” Wade said. He said this in an interview with CNBC.
Inflation is closely related to interest rates. A CNBC/SurveyMonkey survey found that one in three small business owners believe inflation has peaked, up 9 percentage points from 24% last quarter. But two-thirds still believe the rise will continue, even as optimism about easing inflation reached its highest level since CNBC and Survey Monkey began asking the question, the highest reading this year. . Still, business owners are cautious, with 38% saying inflation is the biggest risk to their business, nearly three times higher than the next biggest risk, consumer demand and interest rates.
Additionally, a quarterly poll by CNBC and Survey Monkey showed that overall confidence rose to 51 out of 100. This is up 4 points from the previous quarter and 9 points from the same period last year, and is the first time it has exceeded 50 points during President Biden’s term. , “I have confidence in the Internet.”
