The National Federation of Independent Business (NFIB) Small Business Optimism Index fell by 2.3 points in January to 102.8. The Uncertainty Index rose 14 points to 100 – the third highest recorded reading – after two months of decline.
“Overall, small business owners remain optimistic regarding future business conditions, but uncertainty is on the rise,” said Bill Dunkelberg, chief economist for NFIB. “Hiring challenges continue to frustrate Main Street owners as they struggle to find qualified workers to fill their many open positions. Meanwhile, fewer plan capital investments as they prepare for the months ahead.”
Key findings include:
- The net percent of owners expecting the economy to improve fell five points from December to a net 47 percent (seasonally adjusted).
- Eighteen percent of owners reported that inflation was their single most important problem in operating their business, down two points from December and matching labor quality as the top issue. The last time it was this low was in November 2021.
- The net percent of owners raising average selling prices fell two points from December to a net 22 percent (seasonally adjusted).
- Seasonally adjusted, a net 26 percent plan price hikes in January, down two points from December.
- Thirty-five percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, unchanged from December.
A seasonally adjusted 35 percent of all small business owners reported job openings they could not fill in January, unchanged from December. Of the 52 percent of owners hiring or trying to hire in January, 90 percent reported few or no qualified applicants for the positions they were trying to fill.
The percent of small business owners reporting labor quality as the single most important problem for business fell one point from December to 18 percent. Labor costs reported as the single most important problem for business owners fell two points to 9 percent, four points below the highest reading of 13 percent reached in December 2021.
Seasonally adjusted, a net 33 percent reported raising compensation, up four points from December’s lowest reading since March 2021. A seasonally adjusted net 20 percent plan to raise compensation in the next three months, down four points from December.