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NFIB: Small Business Optimism Fades as Labor Challenges Persist

  • NFIB monthly survey shows decline in small business optimism in September
  • Small business owners continue to grapple with challenges in labor supply and quality
  • Respondents were more pessimistic about the economy, but also more likely to expect real sales to increase

Summary by Dirk Langeveld

Small business owners were less optimistic about the current economic climate as they face persistent labor challenges, according to a recent report from the National Federation of Independent Business.

The organization’s monthly Small Business Economic Trends report shows that the Small Business Optimism Index in September was 99.1, down two points from the previous month. The reading is the lowest since March 2021.

“Small business owners are doing their best to meet the needs of customers but are unable to hire workers or receive the needed supplies and inventories,” said Bill Dunkelberg, chief economist at NFIB. “The outlook for economic policy is not encouraging to owners, as lawmakers shift to talks about tax increases and additional regulations.”

  • 51 percent of small business owners said they are unable to fill open job postings, a record high and more than twice the 48-year average of 22 percent
  • September was the third consecutive month where the share of businesses reporting difficulty filling positions increased
  • 28 percent said labor quality was the top challenge they were facing, while 12 percent cited labor costs
  • On net, 42 percent said they have raised compensation for workers and 30 percent plan to do so in the next three months
  • 67 percent said they hired or tried to hire in September, and 26 percent said they plan to create new jobs in the near future – down six points from August but still higher than historic averages
  • Among the 10 components influencing the optimism score, five were down and three were up
  • Small business owners were less likely to plan an increase in employment, expect the economy to improve, or plan to make capital outlays or increase inventories; they were more likely to expect real sales to increase
  • A net negative share of 33 percent expect business conditions to improve, down five points from August

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