The backbone of the American economy flashes a warning about stagflation as uncertainty on tariffs and release – “Storm clouds are formed”

• A recent study of small businesses He has erected numerous red flags on economics, including trends that indicate the potential pressure of the stagflation. This is like President Donald Trump holds a company, speculating what he will do next in federal dismissals and tariffs, raising uncertainty about the prices, costs and spreads of expansion.

Small companies are the backbone of the US economy because they employ a vast majority of workers, and they flash warnings on stagflating pressure.

On Tuesday, NFIB Optimism Index for small businesses It dropped by 2.1 points in February at 100.7, while reading insecurity increased 4 points to 104, the second highest level was recorded.

Other findings collected red flags: smaller owners of companies expect the economy to improve, sales expectations were gloomy, and profit trends were getting worse.

Additional data points could lift alarms about stagflation, a combination of slower growth or contraction plus greater inflation.

The research has shown that only 12% of the owners think that now is a good time to expand, the fall of 5 points from January and the biggest monthly decline since April 2020.-where the economy was still wrapped from the early phase of Pandemija Covid-19.

And the share of companies owners that increase average sales prices has jumped 10 points since January. This is the highest monthly increase since April 2021, when the increase after the inflation pandemia took off and the third highest in the history of the survey.

“The confidence that the economy will continue to grow pale, even with a new managerial team,” the NFIB report states, alluding to Trump’s administration.

Cited US tariffs and retaliation from affected countries as well as Federal government that misses workers and pruning expenditure.

NFIB added that many small businesses support the work of other companies with government contracts.

“All in accordance with the general tone of financial print, the economy is still growing, but at a slower and slower speed, storm clouds are formed,” he warned.

Consumers are also echoed by prefabricated pessimism among small business owners-whose consumption is the driving force of GDP and previously held an economy resistant to the consequences of the feet.

Latest Sentimen Senames University of Michigan It crashed 11% from the previous month due to fears with inflation. The expectations of inflation in the year and managed to increase from 4.3% last month to 4.9% of this month, which is the highest from November 2022 and the third month of an unusual major increase. Long -term inflation expectations have increased from 3.5% to 3.9%, which is the highest increase in the month of the month since 1993.

Torsten Sløk, the main economist in Apollo Global Managementsaid in a note on Thursday that this “Economy of waiting and see” It is characterized by consumers and companies that are more careful about spending decisions.

“The waiting and viewing economy is no longer just for companies that are directly involved in the store with Canada and Mexico. Uncertainty for small businesses is close to high levels of all time. This is a problem because small businesses are the foundation of the economy, which makes up more than 80% of the total US employment,” he warned.

This story is originally shown on Fortune.com

Source link