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BizReport : Internet : September 08, 2021

SMBs building but inflation worries on the horizon

Between mandates to strictly enforce patron numbers, mask mandates, and fears about the deadly COVID-19 virus, small businesses have struggled throughout the pandemic. However, not all is horrible for SMBs.

by Kristina Knight

According to new CallRail data about 11% of small businesses grew during the pandemic. Of those showing strong growth most (81%) say a savvy marketing strategy was key to engaging shoppers and letting them know how they could support small and local businesses.

However, despite the increase for some small businesses, some experts worry that the pandemic effects - from consumer to stimulus spending - will have an impact on inflation, and perhaps send the US economy into a recession.

Jack Kleinhenz, Chief Economist for the National Retail Federation, notes that jobless claims stood at 353,000 (week ending August 21), the lowest point since March of 2020. However, with more than 10 million jobs available and only about 9.48 million people actively looking for work businesses must offer money pay to job seekers. Much of that increase in costs will be passed on to the consumer in the form of higher prices for goods and services.

"[As] as the economy moves forward into the later months of 2021, federal aid will be tapering off and there will be an important focus on the ability of the labor market to generate ongoing strength in wages and salaries to support spending. U.S. consumers remain in the mood to spend but the labor market and job creation will play an increasing role in their ability to do so," said Kleinhenz, via NRF Monthly Review. "We will be monitoring labor market developments intently to determine if expanded payrolls expected in the coming months will influence inflationary pressure, especially as wages and salaries increase."

Overall, the NRF believes retail spending will increase between 10% and 13% from 2020's spend.

Tags: advertising, CallRail, ecommerce, ecommerce forecast, National Retail Federation, NRF, SMB tips, SMB trends

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