Small business sentiment plummets due to labor worries and rising costs -NFIB report shows greatest decline in 13 months

In January, U.S. small business sentiment reached its lowest point since May 2023, according to a report published on Tuesday. The National Federation of Independent Business monthly sentiment index fell to 89.9 from 91.9 in December, marking the largest decrease since December 2022. This keeps the index below its 50-year average of 98 for a 25th consecutive month.

Despite these challenges, small business owners are making adjustments to respond to the economic challenges they are facing. Labor quality and inflation were the top concerns for business owners in January, with sales conditions tightening as the share of owners reporting profit growth fell to a net negative 30% from a net negative 25% in December.

Looking ahead, the portion of owners expecting better business conditions in the next six months fell 2 points to negative 38%. Additionally, the share of owners who expect higher real sales fell 12 points to negative 16% in January. These statistics paint a sobering picture of the challenges faced by small business owners, but there is hope that with continued adaptation and innovation, they can overcome them and continue to thrive.

By Editor

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