Small Business Optimism Declines Slightly in October, Labor Quality Remains Top Concern
Small business optimism dipped slightly in October, falling 0.6 points to 98.2, though it remains above the 52-year average, according to data released today.
The National Federation of Independent Business (NFIB) reported that the October Small Business Optimism Index reflects lower reported sales and profits among owners. However, the Uncertainty Index saw a significant drop, falling 12 points from September to 88 – its lowest level this year. This index is closely watched by economists as an indicator of potential investment and hiring decisions.
Labor quality continues to be a major challenge for small businesses, with 27% of owners citing it as their single most important problem, a 9-point increase from September and the highest level since November 2021. “Optimism among small businesses declined slightly in October as owners report lower sales and reduced profits,” said NFIB Chief Economist Bill Dunkelberg. “Additionally, many firms are still navigating a labor shortage and want to hire but are having difficulty doing so, with labor quality being the top issue for Main Street.” Price increases, both currently and planned, also saw a slight decrease, with a net 21% of owners raising prices and a net 30% planning to do so in the coming months. You can learn more about the Small Business Optimism Index on the NFIB website.
The NFIB’s monthly index is considered a key economic indicator, used by organizations like the Federal Reserve to assess the health of the U.S. economy. The typical NFIB member employs between one and nine people and generates around $500,000 in annual sales, representing a significant portion of the American workforce. The NFIB also debuted a new podcast, “Small Business by the Numbers,” to further discuss these trends and the challenges facing Main Street businesses; find more information on the Bureau of Labor Statistics website.
Officials stated that the NFIB will continue to monitor these trends and advocate for policies that support small business growth.
