NFIB: Small Businesses Still Recovering

The National Federation of Independent Business (NFIB)’s Optimism Index decreased 0.1 points in October to 90.7, marking the 22nd month below the 50-year average. The last time the Optimism Index was at or above the average was December 2021.

“This month marks the 50th anniversary of NFIB’s small business economic survey,” said Bill Dunkelberg, chief economist for NFIB. “The October data shows that small businesses are still recovering, and owners are not optimistic about better business conditions. Small business owners are not growing their inventories as labor and energy costs are not falling, making it a gloomy outlook for the remainder of the year.”

Key findings include:

  • Twenty-two percent of owners reported that inflation was their single most important problem in operating their business, down one point from last month.
  • Owners expecting better business conditions over the next six months was unchanged from September at a net negative 43 percent (seasonally adjusted).
  • Forty-three percent (seasonally adjusted) of owners reported job openings that were hard to fill, unchanged from September and remains historically very high.
  • Seasonally adjusted, a net 24 percent plan to raise compensation in the next three months, up one point from September.

As reported in NFIB’s monthly jobs report, a seasonally adjusted net 17 percent of owners plan to create new jobs in the next three months. Overall, 61 percent of owners reported hiring or trying to hire in October. Of those hiring or trying to hire, 90 percent of owners reported few or no qualified applicants for the positions they were trying to fill.

Seasonally adjusted, a net 36 percent of owners reported raising compensation, unchanged from September. A seasonally adjusted net 24 percent of owners plan to raise compensation in the next three months, up one point from September.

The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in October 2023.

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