After a long run of strong spending, there are signs that consumers are beginning to slow down the pace of purchasing just a bit.
U.S. retail sales fell 0.1% in October, the first decline since March. This is an indicator that inflation is easing — which is good news — but the timing is not ideal for small-business owners who depend on holiday shopping to remain profitable.
There’s a reason why Black Friday is called Black Friday, after all.
So, as we enter into the heart of the holiday shopping season, remember that one of the best ways you can help your community is to shop local. Check out your local farmer’s market. Head downtown and visit the shops. Invest in the community you call home.
Small businesses need our support all year round, but it’s especially important during the holiday season. Last year, as much as 65% of small businesses’ annual revenue was generated during the holidays, according to the U.S. Chamber of Commerce.
And money spent at a small business pays dividends well beyond the business where the money is initially spent. For every dollar spent at a small business, an average of 67 cents stays in the local community. The small business owners pay taxes that support the local community and schools. They give to nonprofits and sponsor youth sports leagues.
And they create jobs. Small businesses employ 61.7 million Americans, totaling 46.4% of private sector employees, according to the Small Business Administration. From 1995 to 2021, small businesses created 17.3 million net new jobs, accounting for 62.7% of net jobs created since 1995.
By getting out and shopping at your local businesses, you can help not only boost their bottom line, but also bolster their confidence. The Association of Washington Business (AWB) is made up of thousands of members, including many of the big businesses that are household names. But the vast majority of our members are small businesses, companies with 10 or fewer employees.
Based on AWB surveys of employers over the last year, it’s clear that many of them are concerned about the state of the economy. The combination of high inflation, rising interest rates and the recent cooling in the economy has them on edge, even if their business is relatively healthy at the moment. This uncertainty and unease about the future is causing some to delay hiring or postpone capital expenditures.
At a national level, the signs of slowing include a drop in employment growth. In October, employers added half the number of workers they added in September. In addition, the unemployment rate rose a half percentage point, and consumer sentiment declined.
All of these are warning signs but it’s hard to say where the economy is going in the coming year. The long-feared recession has failed to materialize, and there are reasons to hope we will avoid one and experience a so-called soft landing instead. But it’s by no means assured.
If you are fortunate enough to have discretionary spending, you can help by contributing to a worthy cause. The AWB Holiday Kids’ Tree Project, which raises money for rural firefighters to distribute to families in need, is one example of many.
And you can shop small. For your hometown businesses, it’s a way to help big.
To learn more about the AWB Holiday Kids’ Tree Project, visit. www.awb.org/initiatives/holiday-kids-tree-project/
Kris Johnson is president of the Association of Washington Business, the state’s chamber of commerce and manufacturers association.