Small Business Optimism Drops for First Time Since June

President Joe Biden signs an anti-fraud Covid-19 small business relief program bipartisan bill
President Joe Biden signs an anti-fraud Covid-19 small business relief program bipartisan bill at the White House on Aug. 5. (Evan Vucci/Bloomberg News)

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Optimism among U.S. small businesses retreated in October for the first time in four months as the sales outlook worsened, while some measures of inflation accelerated.

The National Federation of Independent Business overall optimism index fell to 91.3 last month from 92.1, the group said in a report Nov. 8. Seven of the gauge’s 10 components decreased, led by both the retreat in sales expectations and a decline in the number of firms planning to hire.

The survey’s inflation metrics were mixed. The net share of owners raising prices ticked down for a fifth month to 50%, the lowest since September 2021 but still well-elevated. However, the share of firms planning to increase prices in the next three months rose for the first time since May, and about a third plan to raise compensation, the most this year.

A similar share see inflation as the single most important issue impacting small businesses, up from 30% in September.


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Labor remains the next-biggest problem. Owners continued to report difficulty attracting qualified applicants and filling open positions. However, hiring plans retreated for the first time since June, though the figure remains elevated.

“Inflation, supply chain disruptions and labor shortages continue to limit the ability of many small businesses to meet the demand for their products and services,” NFIB Chief Economist Bill Dunkelberg said in a statement.

Some 13% owners expect lower real sales in the next three months, up from 10% in September. Nearly half said they expect business conditions to dim over the next six months, an increase from September.

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