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CHART OF THE DAY: Small business optimism fades and wage stagnation hits employees

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The National Federation of Independent Business compensation index points toward wage stagnation as small firms adjust to an impaired U.S. economy.

Similar to what occurred following the Great Recession, we expect wage stagnation to characterize the compensation outlook for some time. Even essential workers are likely to endure a wage freeze in order to retain their jobs as businesses wait for an increase in demand and an economic recovery that gets back to January 2020 pre-pandemic levels. The overall NFIB Small Business Optimism Index declined in July as the virus continued to spread in many states, resulting in a pause or rollback of reopening.

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About Kevin Depew

@KevinDepew

As RSM’s deputy chief economist and industry eminence program leader, Kevin provides RSM’s clients with macroeconomic and industry perspectives and insights they need to successfully manage their middle market businesses. He helps produce two unique reports—The Real Economy and the RSM US Middle Market Business Index—which offer insights into the trends and attitudes relevant to the middle market.

In addition to working with external clients and presenting the middle market economic perspective on webinars and at industry events, Kevin leads the firm’s industry eminence program. The program enables senior analysts across key client industries to forecast industry trends, including how artificial intelligence, machine learning and data will reshape business in the short- and longer term.

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