The National Federation of Independent Business (NFIB) Small Business Optimism Index decreased two points in January to 89.9, marking the 25th consecutive month below the 50-year average of 98.
“Small business owners continue to make appropriate business adjustments in response to the ongoing economic challenges they’re facing,” said Bill Dunkelberg, chief economist for NFIB. “In January, optimism among small business owners dropped as inflation remains a key obstacle on Main Street.”
Key findings include:
- The frequency of reports of positive profit trends was a net negative 30 percent, five points worse than in December and a very poor reading.
- Twenty percent of owners reported that inflation was their single most important problem in operating their business, down three points from last month and one point behind labor quality as the top problem.
- Small business owners’ plans to fill open positions softened, with a seasonally adjusted net 14 percent planning to create new jobs in the next three months, down two points from December and the lowest level since May 2020.
- Thirty-nine percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, down one point from December and the lowest reading since January 2021.
As reported in NFIB’s monthly jobs report, 39 percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period. Seasonally adjusted, a net 39 percent reported raising compensation, up three points from December. A seasonally adjusted net 26 percent plan to raise compensation in the next three months, down three points from December. Ten percent cited labor costs as their top business problem and 21 percent said that labor quality was their top business problem.
Twenty percent of owners reported that inflation was their single most important problem in operating their business, down three points from last month and one point behind labor quality as the top problem.