Curtis Dubay
Chief Economist, U.S Chamber of Commerce


September 22, 2023


September 22, 2023


Small businesses feel good about the future, according to the Q3 MetLife and U.S. Chamber Small Business Index.‌

Why it matters: Main Street employers remain resilient in the face of high inflation and the worker shortage.

By the numbers:

  • 66% of small businesses report that their business is in good health.
  • 72% say they are comfortable with their cash flow.

What keeps small business owners up at night?

  • 52% said inflation is their biggest challenge.
  • 56% said keeping up with employee salary expectations is also a challenge.

Our take: “With fears of a recession likely in the rearview mirror and inflation starting to ease, small business owners are feeling a lot better than they were a year ago,” said Tom Sullivan, Chamber Vice President of Small Business Policy.

Read more here.

What Really Caused Inflation

September 20, 2023

New Federal Reserve research finds that well-understood economic factors stemming from supply and demand caused inflation. This led economic analyst Kyla Scanlon to conclude on a Bloomberg Opinion social media video, “Greedflation wasn’t really a thing.”

Why it matters: This lines up with what I wrote in May: “Prices rise when we have too many dollars chasing too few goods and services. There is nothing more complicated to the story than that.”

Inflation was spurred by trillions of dollars of stimulus from federal government spending and easy money policy from the Federal Reserve. Both were necessary to sustain the economy during lockdowns.

  • Add supply chain disruptions and we saw fewer goods available which drove up prices.

Bottom line: Analysts and politicians would be wise to avoid simplistic narratives and stick to facts and solid reasoning in the future.

Inflation Persists: CPI Rises 3.7% Annually

September 15, 2023

The Consumer Price Index (CPI), the broadest measure of consumer prices, rose 3.7% annually in August, up from 3.2% in July. Inflation is down from the peak of 8.8% in June 2022 but still above the Fed’s 2% target rate.

  • On a monthly basis, inflation rose 0.6% from July to August. This is much faster than from June to July when prices rose 0.2%.
  • Gas prices and housing were the biggest contributors to inflation in August.

Be smart: Core prices, which strip out volatile elements like food and energy, rose 4.3% on an annual basis and 0.3% from July to August.

  • The Federal Reserve looks at this metric closely. It is still high and hasn’t come down much since the Fed started raising interest rates in March 2022.

Why it matters: We are still far from getting inflation down to the 2% target.

  • The stickiness of the core data likely means the Fed will have to keep future rate hikes on the table. Many expect it won’t raise rates again, but the data show more increases may be needed.

By the numbers:

  • Wages rose 0.2% in August, only the second time this year that wages rose less than inflation on a monthly basis.
  • Energy prices rose 5.6% from July to August, driven by a 10.6% jump in gas prices. Electricity rose by 0.2%.
  • Housing rose 7.3% on an annual basis.
  • Grocery prices rose 0.2% in August, up 3% annually
  • Used car prices fell 6.6% from a year ago, but new car prices rose 2.9%.

Credit Cards Bolster Consumer Spending

September 13, 2023

Total credit card debt rose 0.8%, reaching an all-time high of $1.27 trillion in July. However, as a percentage of after-tax income, it is still well below the average of the last 20 years.

Why it matters: Consumers are using their credit cards to continue spending at the robust levels they have been for the last three years.

Be smart: At the same time, consumer borrowing for things like cars, RVs, education, boats, trailers, and vacations rose a modest 0.2% in July. The difference in these types of consumer credit is interesting.

  • Credit card rates don't fluctuate as much as other rates because the principal is capped, and the debt is unsecured.
  • Because of this, consumers are using credit cards to keep spending on everyday items but are spending at a slower rate on bigger ticket items.

Looking ahead: This situation is likely to continue. Wages, after factoring in inflation, are rising, albeit modestly. It will take some time to make up for lost purchasing power. Consumers should be able to keep spending, using their credit card balances to fill gaps.

  • But: They may continue to hold off on borrowing for larger purchases that would weigh on their budgets.

Go deeper:

Inflation - Not Defeated Yet

September 8, 2023

Retail sales rose 0.7% in July, coming off a strong 0.3% increase in June. When adjusted for inflation, sales were even stronger. Back-to-school shopping and Amazon’s Prime Day had an effect, especially on online sales.

Why it matters: COVID savings are largely spent and credit card balances have risen sharply. But consumers continue spending because of the strong jobs market and income growth that is now outpacing inflation.

By the numbers:

  • Sales rose at non-store retailers (mostly online sellers) (1.9%), food and drinking places (1.4%), sporting goods and hobby stores (1.5%), clothing and accessory stores (1%), food and beverage stores (0.8%), general merchandise stores (0.8%), building material and garden supply stores (0.7%), health and personal care stores (0.7%), and gas stations (0.4%).
  • Sales declined at furniture stores (1.8%), electronics and appliance stores (1.3%), motor vehicles and parts dealers (0.3%), and miscellaneous stores (0.3%).

Bottom line: As long as the job market remains robust and incomes remain steady, consumers will have money to spend.

Prices Rose 3.2% Annually in July

August 11, 2023

The Consumer Price Index (CPI), the broadest measure of consumer prices, rose 3.2% annually in July. That is up from June when it was 3%, but well down from the peak of 8.8% in June 2022.

  • On a monthly basis, inflation rose 0.2% from June to July, the same rate as from May to June.

Why it matters: We are still far from getting inflation down to the Federal Reserve’s 2% target.

Big picture: Core prices, which strip out volatile elements like food and energy, rose 4.7% on an annual basis and 0.2% from June to July. This is the metric the Fed looks at most closely, and it is still very high and hasn’t come down much since the Fed started raising interest rates in March 2022.

  • The stickiness of the core data likely means the Fed will have to keep future rate hikes on the table.

Other key data points:

  • Energy prices fell 13% because of a 20% drop in gas prices. Electricity rose by 3%.
  • Food at home (groceries) prices rose 0.3% in July and are up 3.6% annually.
  • Housing rose 7.7% on an annual basis.
  • Used cars were down 5.6% from a year ago, but new cars were up 3.5%.

Economic Policy Must Focus on Lack of Workers

August 9, 2023

Businesses created 187,000 jobs in July, continuing to drive our economic growth, even though the number came in just under the expectation of 200,000 jobs created. The labor force grew another 152,000.

Why it matters: We are now more than 2.6 million workers above the pre-pandemic participation level.

  • But, if we had the same participation rate now as in February 2020, there would be 1.9 million more workers in the labor force.

Big picture: The focus of policymakers must shift from a lack of jobs to a lack of workers. This was always on the horizon as our population aged, but COVID accelerated this. The aim will be to bring more workers into the labor market.

What we’re doing: In 2021 the Chamber launched the America Works Initiative and remains focused on helping employers develop and discover talent to fill open jobs.

By the numbers:

  • Wages rose 0.4% from June and 4.4% annually compared to July 2022.
  • Education and Health added 100,000 jobs in July. Wholesale and Retail Trade added 26,000 jobs. Other services rose by 20,000. Construction increased by 19,000. Financial Activities rose by 19,000. Leisure and Hospitality added 17,000. Government increased by 15,000, and Mining and Logging added 1,000.

Read more from the Chamber:

  • Economic Data: Comprehensive quantitative snapshots of business sectors and topics to help business and political leaders make informed decisions.
  • Workforce Data:Capturing the current state of the U.S. workforce.
  • Small Business Index: The MetLife & U.S. Chamber of Commerce Small Business Index is released on a quarterly basis and is compiled from 750 unique online interviews with small business owners and operators each quarter. The Index delivers a comprehensive quantitative snapshot of the small business sector as well as explores small business owners’ perspectives on the latest economic and business trends.
  • Middle Market Business Index:The survey panel consists of approximately 1,500 middle market executives and is designed to accurately reflect conditions in the middle market.

About the authors

Curtis Dubay

Curtis Dubay

Curtis Dubay is Chief Economist, Economic Policy Division at the U.S. Chamber of Commerce. He heads the Chamber’s research on the U.S. and global economies.

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