According to a recent survey, small businesses in the United States might opt out of Christmas bonuses this holiday season due to chronic inflation.
The November edition of the Freedom Economy Index surveyed small business owners and discovered that 42% who would generally pay Christmas bonuses to their employees stated they couldn’t afford them this year. A further 28% said they would give out fewer Christmas bonuses. 25% indicated their bonuses would be around the same, while roughly 5% predicted that this year’s Christmas bonuses would be more than those in previous years.
One major factor contributing to the difficulties faced by business owners was ongoing inflation. Even while inflation has decreased from its 40-year peak of 9.1% in June 2022, it is still much higher than the Federal Reserve’s 2% target, standing at 3.2% in October. This is the case even though the Fed raised interest rates to their highest point in 20 years in an attempt to curb growing costs.
In response to the study asking business owners how inflation affects their bottom lines in November, over 81% of participants reported that their suppliers’ prices had increased in the previous 30 days, up from 76% in October.
Additionally, it was discovered that a significant majority of business owners, 91% of whom responded, anticipated that “inflation will continue to be higher than normal” during the next six months, up from 87% in October.
According to the study, business owners’ optimism about their companies increased marginally from 28% in October to 31% in November, while their pessimism dropped from 55.1% in October to 47.8% in November. Both changes, however, were still within the survey’s margin of error.
Ultimately, the Freedom Economy Index study further inquired about the greatest need that businesses are currently facing. A 31% majority stated they want “more economic stability” to support their business, while another 23% put a desire for “reduced inflation” on their Christmas wishlist.
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