Many businesses fall short in October rent

Rent delinquency rates among U.S. small businesses increased significantly last month, a new report shows.

About 37% of small businesses, which between them employ almost half of Americans working in the private sector, were unable to pay their rent in full in October. That’s according to a survey from Boston-based Alignable, a network of 7 million small-business members. It’s up 7 percentage points from last month and is now at the highest pace this year, the survey showed.

Chuck Casto, head of research at Alignable, said small-business owners are resilient, but incomes are “basically being eaten away by inflationary pressures.”

The survey of 4,789 small business owners was conducted Oct. 15-27. The findings partly reflect how inflation is affecting small businesses. More than half say their rent is at least 10% higher than it was six months ago.

About 49% of restaurants were unable to pay their rent last month, up from 36% in September, while 37% of real estate agents couldn’t pay their rent, up from 27% in September, reflecting the fallout from a slowdown in home sales as higher mortgage rates chill the housing market.

COVID-19 supply chain issues also remain a major obstacle for companies, particularity for small-business owners who run car repair shops and auto dealerships.

The scarcity of parts their customers need to fix their vehicles is still slowing business. Almost half of car repair shops and auto dealerships were not able to meet their rent in October, the report said.

Alignable found that one-third of firms are at risk of closing if revenue does not “ramp up” in the coming months.

Stocks end up with big gains for October

Stocks closed broadly lower on Wall Street Monday, a downbeat finish for major indexes in an otherwise banner October for the market, including the best month for the Dow Jones Industrial Average since 1976.

Technology and communications stocks were the biggest drags on the broader market. Apple fell 1.5% and Google’s parent fell 1.8%.

Stocks gained ground throughout October as investors shifted their focus to the latest round of corporate earnings. More than half of the companies within the S&P 500 have reported results and shown overall earnings growth of 2.3%, according to FactSet.

Companies have so far given investors a mixed bag of results and forecasts as Wall Street tries to get a better picture of the economy. Inflation remains stubbornly hot and the Federal Reserve has been raising interest rates aggressively to try to slow down the economy and tame high prices. The strategy risks hitting the brakes too hard on economic growth and sending the economy into a recession.

Bond yields have been hovering near multiyear highs as the Fed continues to raise interest rates.

The yield on the two-year Treasury, which tends to track expectations for Fed action, rose to 4.48% from 4.42% late Friday.

The 10-year yield, which influences interest rates on mortgages and many other loans, climbed to 4.07% from 4.02% late Friday.

Compiled from Bloomberg and Associated Press reports.