Two Big Misses

Economic news souring for local biz

Two big economic indicators released within the past week will be challenges for small and medium sized business over the coming months of 2021. Coincidentally, both were off by a factor of 4x versus estimates.

First, jobs data for April: The consensus for the month was a major disappointment. Non-farm payroll employment added 266K jobs during April, as the unemployment rate ticked up a notch to 6.1%. Normally this would be considered a solid month, but not with estimates pegged at 1M. Add to this the fact that job openings have surged greatly, as 60% of small businesses were looking to hire during the month. Unfilled jobs hit historic highs.

unfilled jobs 2021 april

Second, the CPI: The Consumer Price Index keeps tabs on the cost of living for Americans. Again, there was a 4x miss on estimates, as expectations were in the +0.2 range. During April, the CPI rose 0.8%, way above these estimates. While this may be an outlier, inflationary concerns are present.

What it means: If hiring remains challenged and prices inflate more, small and midsized companies will be pinched at both ends of their production and profitability moving forward.

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