Business

Where Main Street stands on the state of the economy and President Biden

US President Joe Biden comments on Russia’s attack on Ukraine in the East Room of the White House in Washington, DC, February 24, 2022.

Leah Millis | Reuters

As President Joe Biden prepares to deliver his address to Congress Tuesday night amid the war in Ukraine that has stoked global tensions, heightened stock market volatility and increased inflationary pressures on the economy, small business owners are among the people Biden needs. to win back.

According to a recent report, Biden’s approval rating among small business owners remains low. CNBC|First Quarter 2022 SurveyMonkey Small Business Survey.

A third (33%) of small business owners approve of Joe Biden’s handling of his job as president, while 67% disapprove, slightly lower than his Q4 2021 approval rating and the lowest approval ratings for the president since he took office.

While the small business community is broadly conservative and Biden’s approval rating is extremely low among Republicans (5%), it fell the most in the first quarter among small business owners who are Democrats (89% in the fourth quarter, 83% now) . However, Biden’s approval among independents has increased (33% in the fourth quarter, 42% now), in contrast to other recent public polls of Americans who do not belong to any major party.

Racially and ethnically, Biden’s approval rating is lowest among white business owners (NET -42), but he still scores highly among black small business owners (NET +22).

Biden’s overall approval from small business owners is in line with 33% of owners who describe current business conditions as good.

The survey was conducted among more than 2,000 small business owners in the United States before the start of the war in Ukraine. War will dominate the speech, but as oil prices hit a seven-year high on Tuesday and wheat prices surged to levels not seen since 2008 as a result of the conflict, Biden will also be forced to fight inflation. pressure that has already gripped the small business sector and affected business decisions and confidence on Main Street.

That The White House has signaled that in addition to focusing on Russia and Ukraine, President Biden will use the speech to argue for a strong economy while acknowledging inflation.

“As CNBC and NFIB surveys show, small business owners continue to grapple with economic headwinds, including labor shortages, rising inflation and supply chain disruptions, and there is little that can be fixed,” said Kevin Kuhlman, director of government affairs at the NFIB. “In early materials and communications, President Biden appears to be acknowledging inflation concerns,” he said, but added that the NFIB remained concerned about policy proposals, including mandatory paid family and sick leave, and an increase in the federal minimum wage. fees, which can put additional pressure on small businesses. and continued attention to legislation favorable to trade unions.

The White House stressed the need for paid holidays, a higher minimum wage, and its support for the union-backed Citizens’ Rights Act. description of economic priorities on Monday.

“Things have changed dramatically on the international front, further raising the stakes for the president at home,” said Karen Kerrigan, president and CEO of the Small Business and Enterprise Council. “At a critical time like this, our president needs the trust and support of the American people behind him.”

For the small business community, she says, that means a speech that addresses priority issues like inflation, health care, and economic recovery, rather than major tax or regulatory measures that will drive up costs or push inflation further for small businesses.

“Americans will hear a lot about how he’s going to cut their spending, how he’s going to continue to build a strong economy in the long run,” White House press secretary Jen Psaki told MSNBC this week.

“We have seen and heard from members of supply chain shrinkage and increased corporate concentration, which is further choking supply chains and pushing up prices,” said Didier Trine, director of policy and political influence for progressive small business trade group Main Street Alliance.

He cited shippers as one example of a challenge Biden could address to small businesses, and the president is expected to highlight efforts to target the shipping industry. Treen said tax equity and targeting large corporations remain a challenge, where progress is also possible for small businesses.

“Small businesses may not be in the same emergency they were a year ago, but they are far from fully recovering,” Treen said.

He and other small business experts cited support for small business health care spending related to affordable health care legislation and tax credits as another area of ​​bipartisan cooperation.

More from CNBC’s Guide to Small Businesses

According to the survey, a growing number (47%) of small business owners are raising prices to offset the increase in supply costs, and more (32%) plan to do so if inflation remains high, which they expect. More than 80% of small business owners expect inflation to still be a problem six months from now (55% say it’s “highly likely”), while only 28% of small business owners are confident in the Federal Reserve’s ability to control inflation.

Overall, 31% of small business owners say inflation is the biggest risk to their business right now, ahead of supply chain disruptions (23%), Covid-19 (20%) and labor shortages (12%).

Inflation message

President Biden’s attempt to highlight a strong economy was outlined in an administration briefing released ahead of the speech, which highlighted that “entrepreneurship and business investment have rebounded, the economy has achieved the fastest job growth in American history, the fastest economic growth in nearly 40 years.” and that there has been a “historic transition from the old, outdated ‘trickle down’ approach to one focused on workers, families and small businesses.”

But inflation remains a poll question that dominates broader economic benefits.

“Inflation is an issue that the current administration doesn’t want to make headlines because it’s being blamed for it and they can’t control it, at least not in the short term,” said Charles Franklin, survey director at Marquette Law School. “It’s also a big problem for the opposition party because nobody likes inflation, they don’t need a special ‘cure’ for it, and they can blame actors.”

Geoff Johns, Senior Editor at Gallup, said its data shows varying economic sentiment depending on a specific issue such as jobs and the stock market, but overall views on the economy have become more negative as inflation has become a bigger issue. “The job market is on par with the best we’ve ever seen, so that’s definitely positive… but I feel like inflation is overshadowing everything else,” Jones said.

“Inflation is an effective issue for Republicans to seize on, to think badly of Biden, while Democrats downplay it. But independents are very concerned, and that’s a problem for Biden and the Democratic candidates,” Franklin said.

Although independent small business owners in the CNBC|SurveyMonkey poll were slightly more positive about Biden compared to the previous quarter (though still expressing majority disapproval), the majority recent Quinnipiac poll released in mid-February found inflation topping the list of the “most pressing issues” facing the country by 27%, and that independents were more closely aligned with Republicans on the issue. Among Republicans, 36% cited inflation, compared to 13% of Democrats, who cited inflation as the main problem. But among the independents, inflation was also the main problem – 32%. The Quinnipiac poll also showed that most Americans expect Russia to go to war.

A Quinnipiac poll found that 6 out of 10 Americans think the economy is getting worse, although most describe their financial situation as good or excellent. Nearly three-quarters, 72% of those surveyed, say rising food and gas prices have forced them to change their spending habits.

In a poll, more than half of independents said they disapprove of the way Biden is doing his job. His overall approval rating in the Quinnipiac poll of 35% in February has matched approval ratings since October, when Quinnipiac first saw Biden’s approval rating fall below 40%. “It hasn’t been able to get any higher since then, and independents aren’t helping those numbers,” said Mary Snow, poll analyst at Quinnipiac.

As in the CNBC poll, Biden’s approval rating for the economy in the Quinnipiac poll (33%) was the lowest since he took office.

“It’s up to him to rethink his politics and political strategy, working through the aisle and governing like a moderate, as he said when he ran for office,” Kerrigan said.

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