This Week’s Economic Roundup
While consumers shrugged off higher gas prices in March, small-business owners are worried about rising material costs and tighter credit. Here's a look at this week's economic developments and how they may impact your business.
Small Business Flat
A decline in the availability of credit, among other factors, has flattened growth in the small-business sector in recent months, a Wells Fargo/Gallup survey reported Monday.
The survey, which polled 603 business owners nationwide in early March, showed little or no gains in revenue, capital spending, or job creation over the past 12 months.
While the survey's Present Situation Index increased two points in the first three months of the year over the previous quarter, from 45 to 47, its gauge of future activity was unchanged, the report showed.
The quarterly survey consists of a dozen questions, with two points added for positive responses, or subtracted for negative responses.
Likewise, a separate survey released on Tuesday found small-business owners are now in a gloomier mood than at the start of the year.
Of 500 business owners polled, 59% said they felt revenues would likely improve over the next 12 months, compared to 67% in January, according to the International Profit Associates Small Business Research Board, a private research group based in Buffalo Grove, Il.
Most owners cited material costs, including higher gas prices, as their biggest concern, the survey showed.
Consumer Mood Improves
Despite rising gas prices, consumers were in a far more buoyant mood in April -- lifting the Conference Board's monthly consumer-confidence index to a four-year high, the New York-based private research group reported Tuesday.
The index, which is based on a survey of 5,000 households nationwide, now stands at 109.6, up from 107.5 in March, and has been regaining strength following sharp declines during last year's storm season, the report showed.
Lynn Franco, director of the board's Consumer Research Center, credited the continued gains on recent improvements in the labor market.
While higher prices at the pump have yet to have an impact, "further increases could dampen the mood," she said in a statement.
Also on the rise was the board's Present Situation Index, which gauges how consumers feel about current economic conditions, as well as the Expectations Index, their outlook over the next six months.
New Home Sales Up
Sales of new homes in March jumped 13.8% over February, the Commerce Department reported Wednesday.
The increase, which boosted sales of single-family homes to an annual rate of 1.213 million units, the highest level so far this year, the report showed.
Sales had plunged 10.9% in February.
The median selling price of new homes in March was $224,200, about 2.2% lower than a year earlier, the report said.