Inflation Cooling, But Remains Higher In Boston Area

NFIB Exec Flags Inflation As “Main Hurdle” For Mass. Small Businesses

AUG. 14, 2024…..Consumer prices in the Boston area rose about 3.5 percent over the last year, compared to a 2.9 percent increase nationally, according to federal data released Wednesday.

The latest numbers from the U.S. Bureau of Labor Statistics show inflation has cooled from 2022, when year-over-year consumer price increases in the Northeast were in the 6 to 7 percent range. This year, increases ranged from 2.4 percent to 3.9 percent year over year.

In the Boston area, energy prices rose 4.3 percent over the last year, and food prices crept up by 1.5 percent, the government said.

Higher costs continue to affect budgets and the interest rates that play a critical role in influencing consumer and business decisions.

On Tuesday, the Massachusetts chapter of the National Federation of Independent Business reported that its Small Business Optimism Index rose in July to its highest reading since February 2022, but has now been below its 50-year average for 31 consecutive months. 

NFIB State Director Christopher Carlozzi said inflation remains the top issue among small business owners, with 25 percent reporting it as their single-most important problem in operating their businesses.

“Inflation continues to be the main hurdle for Massachusetts’s small businesses,” Carlozzi said. “Cost pressures on Main Street have not eased much, and small business owners continue to adjust business operations to accommodate the rising prices. Instead of working to defray these costs by reducing state taxes and regulations, Beacon Hill lawmakers spent the past legislative session proposing new ways to pile on new mandates. Even the so-called economic development bill had provisions that would harm smaller employers.”

The small business group reported that among the 57 percent of owners hiring or trying to hire in July, 86 percent reported few or no qualified applicants for the positions they were trying to fill.

The economic development bill and several other consequential bills remain incomplete, but not completely dead, after Democrats in the House and Senate couldn’t reach late-July deals. Legislators have largely departed Beacon Hill for their traditional August recess but say they might return. Many incumbents face no opponents in the Sept. 3 primary election and the Nov. 5 general election.

In a statement Wednesday, President Joe Biden said that “prices are still too high” but noted that inflation has now fallen below 3 percent and core inflation has fallen to the lowest level since April 2021.

“We have more work to do to lower costs for hardworking Americans, but we are making real progress, with wages rising faster than prices for 17 months in a row,” Biden said. “Large corporations are sitting on record profits and not doing enough to lower prices.”

Biden, who is serving out his last months in the White House, said his administration is working to lower prescription drug prices, cut red tape to build more homes, take on “corporate landlords that unfairly increase rent,” and trying to address “price gouging and junk fees to lower everyday costs from groceries to air travel.”