The U.S. Department of Labor reported today that inflation over the past 12 months soared at its fastest pace in more than 40 years, squeezing American consumers and businesses. According to the agency's report, the consumer price index jumped 8.5% in March from a year ago -- the biggest year-over-year increase since December 1981. Inflation rose 1.2% from February to March, up from a 0.8% increase from January to February.
"A lot of small business owners right now are tackling this issue of inflation primarily by shrinking down basically what consumers are getting or [by] increasing prices," says Alfredo Ortiz of Job Creators Network (JCN). "But small businesses have a tough time increasing [their] prices, much more so than a large business does, because a lot of their customers just can't take price increases that would have to happen to keep them profitable."
Martha Brandau, owner of Up North Family Café in Cheboygan, told "Fox & Friends" on Friday that she and her husband tried their best but couldn't keep up with the rising cost of eggs, milk, and meat:
Brandau: "It was getting to a point where less people were dining out the last three or four months, which took our sales down 50% and then 30 to 50% increase in product," she said. "It got to a point where is was kind of a no-brainer for [us] to say now is the time."
Brandau thought things were looking up last year when restrictions were being lifted and people had stimulus money:
Brandau: "We were starting to climb that hill and almost get to the top, and then all of a sudden – between supply delays, increase in supplies, lack of supplies – it kind of hit us in a direction we didn't think we were going to be affected by."
The café's Facebook page shows photos of all the furnishings, fixtures, cooking utensils, and seasonal decorations that were up for sale on Friday morning.
JCN's Ortiz says people had better pay attention. "Small businesses are really the glue that hold communities together," he explains. "They're the backbone of our communities – and as they are holding our communities together, they also hold our economy [and] our country together."
According to the JCN spokesman, two-thirds of new job growth in the U.S. "usually rests in the hands of small businesses." Consequently, as small businesses start shutting down or feeling less confident about the future, he warns hiring likely will be coming to a grinding halt.
