U.S. President Joe Biden delivers remarks on economic growth, jobs and deficit reduction in the Roosevelt Room of the White House in Washington, U.S. May 4, 2022.
Evelyn Hockstein | Reuters
Fewer small business owners now than a year ago approve of Joe Biden’s job as president. In fact, small business owners are twice as likely to disapprove than approve of Biden, latest CNBC survey finds | SurveyMonkey Small Business Survey, which was conducted April 18-25 among 2,027 small business owners in the United States.
Biden’s endorsement among this group hasn’t budged in the past three quarters, but few small business owners have been particularly focused on politics during this time. Instead, for the third consecutive quarter, inflation dominates concerns on Main Street. In this latest survey, around four in 10 small business owners (38%) say inflation is the biggest risk to their business right now, at least twice the number who report supply chain disruptions. (19%), labor shortages (13%), or Covid-19 (13%).
About three in four small business owners say they are currently experiencing increased cost of supplies, a number that has remained stable since the fourth quarter of 2021.
Of those experiencing rising costs, 40% say they need to raise prices to keep up, and 35% plan to raise prices if their costs continue to rise.
Yet that leaves 24% absorbing rising costs without raising prices themselves. With rising inflation in all sectors, small businesses may be the most reluctant to raise their own prices because they lack some of the pricing power that helps big businesses maintain dominance.
One of the worries about inflation is how quickly it can spiral out of control: as prices rise at each stage of production, they push prices up further at each subsequent stage. Also, as prices rise, companies are forced to raise wages, but those higher wages allow consumers 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, twice as many small business owners say now is a bad time to raise prices than now is a good time to raise prices.
Of course, small business owners cannot fight inflation alone; it is squarely in the domain of the Federal Reserve and the Biden administration to determine the policy shifts that can curb widespread price increases. So far, few on Main Street are impressed with the response.
This quarter, only 27% of small business owners say they are confident in the Federal Reserve’s ability to control inflation, which is almost exactly the same as last quarter’s 28%. On Wednesday, Chairman Jerome Powell announced that the Fed would raise interest rates by half a percentage point – the first step since the recent inflation spurt began last year.
It’s no coincidence, just as inflation began to rise last fall, small business owners’ approval of how Joe Biden is doing his job as president sank — and there she is. has remained since. During the first three quarters of his presidency, Biden averaged a 42% approval rating among small businesses: not great, but not great considering a majority of small business owners align themselves more on the Republican Party than on the Democrats.
Over the past three quarters, Biden’s approval rating has fallen below 30, and fewer small business owners endorse Biden now than ever before. Other polls suggest Biden needs to get inflation under control to help prop up his overdue job endorsement.
Much like our quarterly survey, Biden’s approval in public opinion polls began to decline last fall, just as inflation began to rise. Presidential endorsement tracking FiveThirtyEight identifies August 29, 2021 as the inflection point when Biden’s disapproval topped his approval in the polling averages. Even then, the speed at which prices were rising was breaking records.
In a new Washington Post and ABC News poll, approval of Biden’s jobs rose slightly from February to April and now stands at 42% overall. That number is still well below the 52% mark Biden scored in the first Washington Post/ABC News poll of his presidency in April of last year.
This latest poll is particularly normative for Biden as it asked about different aspects of presidential endorsement. Even though his overall approval rating is underwater, a majority of adults in the United States (51%) approve of Biden’s handling of the coronavirus pandemic. Fewer are those who approve of his handling of the Russia/Ukraine situation, his ability to create jobs or his management of the economy in general. And, at the very bottom of the list, only 28% approve of his handling of inflation.
Presidents are credited with a strong economy in good times and blamed for a struggling economy in bad times, as Biden is currently experiencing. With inflation leading across the country, including on Main Street, Biden’s job endorsement won’t recover unless he accepts it.