Retail sales rose less than expected in February, and the Small Business Optimism index fell to 100.7 in February from its January reading of 102.8.
Elizabeth Gore, co-founder and president of Hello Alice and host of the upcoming Yahoo Finance podcast The Big Idea, joins Market Domination Overtime to discuss the new data and explain what it signals about the state of the US consumer and small businesses.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
Retail sales rising less than expected in February, signaling trouble for the US consumer or on the part of the US consumer. Comes after a recent report showing small business optimism receded in February. That's according to the National Federation of Independent Business. Here with more on what's weighing on small business is Elizabeth Gore, co-founder of Hello Alice and host of Yahoo Finance's upcoming podcast, The Big Idea. Elizabeth, it's good to see you here. So, we've been hearing all these sentiment indicators. The small businesses that you're talking to, what are they most worried about right now?
Well, Heidi, thanks for having me. Yeah, it's almost like my tween kids, right? They're happy one day, sad the next. Oh my goodness. Um, we had some optimism coming into the year, and now it has gone down, and everything comes down to core unit costs. So whatever is going to rise costs, raise costs for a small business owner is going to get them concerned. The the threat of tariffs, that is going to raise unit costs. The fact that interest rates are not going to go down right now. The fact that we are not seeing capital go down and it's costs to access loans, credit, and grants. Uh, that's got everyone concerned.
And and how is this going to affect um existing small business versus say small business creation?
Well, you know, it's interesting if you look at existing small businesses, they're just as affected because they're looking at again, what is their supply chain they're having to purchase constantly. If you look at food services, if you look at construction, they're buying the same goods week over week, and if those costs are going up, it's a concern. On the flip side, if you look at a net new business, let's stay in food services, they're going to have to buy electronics, they're going to have to buy that oven. So they're buying larger purchases. Again, that's higher costs. So both those are being impacted right now. I will say for those who have been around for a while, you know, being really resilient, being really smart about your cash flow and a bit more conservative than normal is important right now.
Um I also wanted to ask about some of the federal uh budget cuts that we've been seeing from the new administration. Uh you know, I think with the Small Business Administration for example, and its interplay with small business in the US. So what kind of effects are are you starting to see if at all, or what are people worried about and talking about?
Well, the the you know, a big thing that people don't discuss every day are our supply chains, supplier diversity contracting. If you look at the billions federal government spends with um small and medium businesses on everything from supply chain to food services to consulting contracts, we are seeing those either stop freeze or go away. That is a big amount of money for small medium businesses. The other one is grants. So grants that come out of the federal government that have stopped have been frozen for small business, whether it's coming out of the SBA or it's coming out of departments. Those are other areas that folks are concerned they're not seeing that cash flow.
Elizabeth, good to see you. Thanks a lot.
Thanks.
