The National Federation of Independent Business (NFIB) Small Business Optimism Index increased 0.9 of a point in July to 91.9, marking the 19th consecutive month below the 49-year average of 98. Twenty-one percent of owners reported that inflation was their single most important problem in operating their business, down three points from June.
“With small business owners’ views about future sales growth and business conditions dismal, owners want to hire and make money now from solid consumer spending,” said Bill Dunkelberg, chief economist for NFIB. “Inflation has eased slightly on Main Street, but difficulty hiring remains a top business concern.”
Key findings include:
- Owners expecting better business conditions over the next six months improved 10 points from June to a net negative 30 percent, 31 percentage points better than last June’s reading of a net negative 61 percent. This is the highest reading since August 2021 but historically very negative.
- Forty-two percent of owners reported job openings that were hard to fill, unchanged from June but remaining historically very high.
- The net percent of owners raising average selling prices decreased four points to a net 25 percent seasonally adjusted, still a very inflationary level but trending down. This is the lowest reading since January 2021.
- The net percent of owners who expect real sales to be higher improved two points from June to a net negative 12 percent, a very pessimistic perspective.
As reported in NFIB’s monthly jobs report, 61 percent of owners reported hiring or trying to hire in July, up two points from June. Of those hiring or trying to hire, 92 percent of owners reported few or no qualified applicants for the positions they were trying to fill. Thirty-three percent of owners reported few qualified applicants for their open positions and 23 percent reported none.
Seasonally adjusted, a net 38 percent reported raising compensation. A net 21 percent plan to raise compensation in the next three months, down one point from June. Ten percent of owners cited labor costs as their top business problem, up two points. Twenty-three percent of owners said that labor quality was their top business problem.