Small business owners' confidence drops to pre-election levels
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So much for the Trump bump: An index that measures small business owners' confidence fell nearly 7 points in the first quarter, erasing last year's post-election surge.
Why it matters: The index, published by the U.S. Chamber of Commerce on Wednesday, is a sign of just how much tariff worries are weighing on the business world right now.
By the numbers: Researchers surveyed 755 small business owners and operators who run companies with 500 or fewer people.
- The index fell to 62.3 in the first quarter, down from 69.1 last quarter, and the exact same level as this time last year. (A higher score indicates more positive sentiment.)
Between the lines: Overwhelmingly, inflation was owners' top concern.
- 58% said inflation is their biggest challenge, the highest level since they first asked in 2021 — even as the rate of price growth is well off the highs seen three years ago.
What they're saying: "There was tremendous optimism that the election would sweep in measures and policies that would lower costs," says Tom Sullivan, vice president of small business policy at the Chamber of Commerce.
- "Not only do small businesses not believe that's happened, but the uncertainty, specifically around tariffs, has led [them] to believe that inflation isn't going down."
The big picture: Small business owners are hardly alone here — CEOs of major companies also saw a drop in confidence in the first quarter.
- And regular folks, AKA the spenders who drive our economy, are also showing signs of anxiety.
- Consumer confidence fell for the fourth straight month, per data from The Conference Board out Tuesday — also weighed down by concerns with Trump policies.
Reality check: This is a pretty negative crew.
- Only 29% say the economy is in good health — that's roughly in line with the 32% who said the same last year, when the economy was in pretty good health.
- It still looks that way. Most official data suggests healthy conditions, as Axios' Macro newsletter pointed out Tuesday.
The bottom line: For now, it looks like we're watching Vibecession 2: Return of the Bummer.
