U.S. President Joe Biden speaks on economic growth, jobs and deficit reduction in the Roosevelt Room at the White House in Washington, U.S., May 4, 2022.
Evelyn Hockstein | Reuters
More than a year ago, few small business owners approved of the job Joe Biden was doing as president. In fact, small business owners are twice as likely to disapprove of Biden, according to the latest information. CNBC | SurveyMonkey Small business surveyconducted April 18-25 among 2,027 small business owners in the US
Biden’s approval in this group hasn’t changed over the past three quarters, but some small business owners have been particularly focused on politics during that time. Instead, for the third straight quarter, inflation prevailed over Main Street concerns. In this latest survey, about four in 10 small business owners (38%) reported inflation as the biggest risk to their business right now, at least twice as much as indicated. supply chain disruption (19%), labor shortage (13%), or Covid-19 (13%).
About three-quarters of small business owners say they are currently experiencing increasing supply costs, a number that has remained steady since Q4 2021.
Of those experiencing growing costs, 40% say they are having to raise prices to keep up, and another 35% are planning to raise prices if their costs continue to escalate.
However, that leaves 24% of those who are having to accept rising costs without raising their own. With inflation rising in every sector, small businesses may be the most reluctant to raise their own prices because they lack some of the pricing power to help large corporations keep their dominant positions. .
One of the worries about inflation is how quickly it can get out of control: as prices rise at every stage of production, they push prices even higher at each subsequent stage. Also, when prices go up, companies are forced to raise wages, but that higher wage leads to consumers being able to spend more money, and the cycle continues.
But you won’t see much acceptance of price gouging on Main Street. Small business owners seem particularly reluctant to take advantage of the current inflationary environment by passing on higher costs to their customers. Overall, the number of small business owners who think now is a bad time to raise prices is twice as high as now is a good time to raise prices.
It is clear that small business owners cannot fight inflation on their own; it is directly in the field of the Federal Reserve and the Biden administration to identify policy changes that could limit widespread price increases. So far, very few people on Main Street have been impressed with the reaction.
This quarter, just 27% of small business owners said they were confident in the Federal Reserve’s ability to control inflation, almost exactly from 28% the previous quarter. On Wednesday, Chairman Jerome Powell announced that Fed will raise interest rates by half a percentage point – The first step taken since the recent inflation run began last year.
Not coincidentally, just as inflation started to pick up last fall, approval of small business owners for the way Joe Biden was doing his job as president sank – and it’s been there ever since. During his first three-quarters of his presidency, Biden averaged an approval rating of 42% for small businesses: not high, but not bad either considering that the majority of small business owners stick with it. with the Republican Party rather than the Democratic Party.
Over the past three quarters, Biden’s approval rating has dropped to a low of 30, and fewer small business owners approve of Biden than ever before. Another poll shows Biden needs to tackle inflation to help support his lagging job approvals.
Just like in our quarterly survey, Biden’s approval in the general opinion poll began to sink last fall, just as inflation started to pick up. Presidential approval tracker FiveThirtyEight identifies August 29, 2021 as the inflection point when Biden’s disapproval overtakes his approval among polling averages. Even at that time, the rate of price increase was break record.
In a new poll from Washington Post and ABC NewsBiden’s job approval rate increased slightly from February to April and now stands at 42% overall. That number is still far below the high of 52% Biden had in the first Washington Post/ABC News poll of his presidency last April.
This latest poll is particularly imperative for Biden because it asks about various aspects of the president’s approval. Although his overall approval rating is underwater, a majority of US adults (51%) approve of Biden’s handling of the coronavirus pandemic. Fewer and fewer people approve of his handling of the Russia/Ukraine situation, his ability to create jobs, or his handling of the economy in general. And, at the bottom of the list, only 28% approved of his handling of inflation.
Presidents take credit for a strong economy in good times and blame it on a struggling economy in bad times, as Biden is experiencing today. With inflation at the forefront of the nation, including on Main Street, Biden’s job approval won’t rebound unless he takes it.
