Small Business Owners Remain Worried About Inflation

Despite cost pressures due to inflation, small business owners are facing challenges, with many raising compensation levels to retain and attract employees. Despite this, the Small Business Optimism Index saw a slight increase of 1.2 points in April to 89.7, marking the first increase of 2024. However, the index remains below the 50-year average of 98 for the 28th consecutive month. The last time the index met or exceeded the average was in December 2021.

Bill Dunkelberg, NFIB Chief Economist, noted that cost pressures are a major concern for small business owners, with many raising compensation levels to retain and attract employees. Despite facing rising levels of uncertainty, small business owners remain historically pessimistic but are focused on serving their customers amidst these challenges.

Key findings from the report include small business owners’ expectations for better business conditions over the next six months improving by six points from November to a net negative 36%. Additionally, a net 29% of owners plan to raise compensation in the next three months, while the net percent of owners raising average selling prices remained unchanged at a net 25%.

In another development related to employment, there was a reversal in trend in plans by small business owners to fill open positions. In March’s jobs report, only one point more than March’s seasonally adjusted percentage planned to create new jobs was reported (a net -1%). However, in April’s jobs report, this number increased by one point again (a seasonally adjusted net -11%), with one more point than March’s job creation plans (a seasonally adjusted net -10%) now planned for each owner surveyed in April compared to February’s full Small Business Economic Trends report and NFIB Jobs Report are available for further analysis.

By Sophia Gonzalez

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