The Economy This Week
The nation's small-business owners are growing more concerned with inflation, as higher selling prices fail to offset rising costs. Here's a look at this week's economic developments and how they may affect your business.
Inflation Fears Grow
Higher selling prices weren't enough to offset rising costs for the nation's small businesses last month, the National Federation of Independent Business reported Monday.
In a survey of the Washington-based lobby group's 600,000 members, most small-business owners cited inflation as their top concern. Lower sales expectations and weaker business conditions also prompted more owners to curb hiring and capital spending, the survey found. Overall, the group's monthly small-business optimism index dropped 0.1 points to 89.2, a level not seen since the recession of the early 1980s.
"The inflation problem is getting worse, not better, as the economy weakens," William Dunkelberg, the group's chief economist, said in a statement.
Typically, about a quarter of the group's members respond to the monthly surveys.
Only 13 companies went public over the second quarter, a decline of 77 percent compared to the same period last year, Hoover's reported Wednesday.
The downturn follows similar declines over the first quarter, putting the total number of initial public offerings this year at just 25 deals, the report said. That's less than half the number of companies that went public by the second quarter of 2007.
Tim Walker, Hoover's industry expert, blamed the declines on lingering concerns about subprime mortgage losses, rising oil prices and the slowing economy. He said the downward trend would likely continue as a result of the upcoming presidential elections, among other factors.
"Some IPO hopefuls, as well as investors, may wait to see what a new administration might bring before deciding to take the risk," Walker said in a statement.
According to the National Venture Capital Association, not a single venture-backed company went public in the second quarter, the first quarter in 30 years without an IPO.
Jobless Claims Dip
The number of new claims for unemployment benefits fell by 58,000 last week to 346,000, the Labor Department reported Thursday.
Despite the declines, which analysts credited to a shortened workweek as a result of the July fourth holiday, ongoing jobless claims have continued to rise, the report showed. The seasonally adjusted insured unemployment rate the previous week inched up by 0.1 points to 2.4 percent, representing about 3.202 million people filing claims.
Pennsylvania, Iowa and Wisconsin saw the biggest drop in new claims last week.