The National Federation of Independent Businesses, a Tennessee-based association of small business owners, found that the net percent of owners raising average selling prices rose to 61% in January, a four-point increase from the previous month and the highest reading since the fourth quarter of 1974.
Price hikes were the most frequent in wholesale (88% higher), manufacturing (71% higher), retail (69% higher) and construction (67% higher).
Another 50% of firms said they boosted wages amid recent difficulty in attracting new workers.
"More small business owners started the New Year raising prices in an attempt to pass on higher inventory, supplies, and labor costs," NFIB chief economist Bill Dunkelberg said in a statement. "In addition to inflation issues, owners are also raising compensation at record high rates to attract qualified employees to their open positions."
Meanwhile, the NFIB's index measuring optimism among small businesses dropped last month to 97.1 – an 11-month low – as owners confronted high inflation, worker shortages and uncertain future economic conditions.
Inflation remains a top concern for small businesses: 22% of owners reported that higher consumer prices is their single most important problem. That is the highest level since 1981.
American consumers are grappling with the hottest inflation in a generation, with the consumer price index climbing 7% in December from a year ago, according to a Labor Department report released last month, marking the fastest increase since June 1982.
Rising inflation is eating away at strong gains and wages and salaries that American workers have seen in recent months: Real average hourly earnings rose just 0.1% in December, as the 0.5% inflation increase eroded the 0.6% total wage gain, according to the Labor Department. On an annual basis, real earnings actually declined 2.4%.
The inflation spike has been bad news for President Biden, who has seen his approval rating plunge as consumer prices rose. The White House has blamed the price spike on supply chain bottlenecks and other pandemic-induced disruptions in the economy, while Republicans have pinned it on the president's massive spending agenda.