INFLATION, RECESSION FEARS & BUSINESS ACTIVITY

A recession in the first half of 2023 is inevitable, feels many. Andrew Moran, the author of “The War on Cash” delves deep to unearth the future with facts.

- 

These days inflation and risk of a recession are the top concerns for U.S. companies in multiple sectors. These worries are beginning to weigh on overall operations, resulting in a slowdown in business activity and declining sentiment according to numerous indices.

The National Federation of Independent Business (NFIB) Optimism Index highlighted that 37 percent of small-business owners reported that inflation was their most important problem in July, the highest it has been since 1979. Moreover, the monthly survey discovered that most owners are raising their average selling prices, and the net percent of owners anticipating real sales to be higher worsened.

“The uncertainty in the small business sector is climbing again as owners continue to manage historic inflation, labor shortages, and supply chain disruptions,” said Bill Dunkelberg, NFIB Chief Economist, in a statement. “As we move into the second half of 2022, owners will continue to manage their businesses into a very uncertain future.”

This coincided with the August IBD/TIPP Economic Optimism Index, which slipped to an 11-year low of 38.1 as consumers continue to be pessimistic about the economy as inflation erases wage gains. This could spell bad news for business conditions.

In this economy, it is all about planning for the worst-case scenario and hoping for the best, says Mike Davis, founding partner of Olive Tree Ridge, a multi-strategy asset management firm.