CPI Index - Historical Chart
Consumer Price Index for All Urban Consumers: All Items in U.S. City Average. Gray shaded areas indicate U.S. recessions.
Source: Federal Reserve Bank of St. Louis (FRED), Series CPIAUCSL. Shaded areas = NBER recession dates. Updated 2026-03-10.
Analysis
Two BLS data series tell a troubling story for small business margins. The Consumer Price Index (CPIAUCSL) has been rising steadily, pushing up the cost of rent, supplies, insurance, and everything else a business buys. Meanwhile, average weekly hours worked in the nonfarm sector (AWHNONAG) have been declining from their pandemic-era highs, meaning each employee is producing fewer hours of output per week.
For a small business owner, this is a double hit. Your expenses are rising at 3-5% per year while the hours of labor you receive per employee are declining. If you hire to make up the hours gap, your payroll costs jump. If you do not, output falls. Either way, the margin shrinks.
This analysis quantifies the squeeze by comparing the trajectories of both series and their combined impact on small business cash flow.
The Data
| Metric | Current | Prior Period | Year Ago | Change |
|---|---|---|---|---|
| Consumer Price Index ★ | 326.6 | 326.0 | 317.6 | 0.56 ↑ |
| Average Weekly Hours (Nonfarm) | 33.80 | 33.80 | 33.60 | 0.00 → |
Source: Federal Reserve FRED. ★ = primary metric on this page.
What the Data Tells Us
The inflation-hours squeeze is especially brutal for labor-intensive small businesses: restaurants, retail, healthcare practices, and professional services. When your costs rise 4% but your employees work 2% fewer hours, you need roughly 6% revenue growth just to maintain the same margin. For a business also carrying debt service, that growth hurdle becomes nearly impossible to clear without either raising prices (risking customer loss) or cutting staff (reducing capacity).
Historical Context
The all-time peak was 326.6 in Jan 2026. The trough was 21.5 in Jan 1947. During the COVID-19 disruption, the reading reached 262.1 in Dec 2020.
Bottom Line for Business Owners
Keeping a close eye on this data helps business owners time their financing decisions. Whether the numbers are moving in your favor or against you, understanding the trend puts you in a stronger negotiating position with lenders.
Inflation Is Rising While Hours Are Falling - Frequently Asked Questions
Several factors: workers' preference for work-life balance post-pandemic, labor market tightness giving employees more bargaining power over schedules, expansion of gig/part-time work, and some employers reducing hours to manage costs. The structural shift may be permanent.
A business with $1M in revenue seeing 4% cost inflation and 2% fewer labor hours needs roughly $60,000 in additional revenue or cost savings to maintain margins. That is $60,000 that cannot go toward debt service, reinvestment, or owner compensation.
The decline in average weekly hours appears to have a structural component. Pre-pandemic, average weekly hours had been on a gradual secular decline for decades, driven by the shift from manufacturing to services and the growth of part-time employment.
Options include investing in automation and technology to get more output per hour, raising prices strategically (focusing on highest-margin products), renegotiating supplier contracts, and restructuring debt to reduce fixed payments during the squeeze period.
Labor-intensive services are hit hardest: restaurants (30-35% labor cost), healthcare practices (45%+), retail (20-25%), and professional services. Capital-intensive businesses with fewer employees feel the hours decline less acutely.
CPI: FRED series CPIAUCSL (Bureau of Labor Statistics). Average weekly hours: FRED series AWHNONAG (BLS Current Employment Statistics). Both are monthly and seasonally adjusted.