NFIB Optimism Index Declined to 95.0 in January

Washington, DC, February 9, 2021-The NFIB Small Business Optimism Index declined in January to 95.0, down 0.9 from December and three points below the 47-year average of 98. Owners expecting better business conditions over the next six months declined seven points to a net negative 23%, the lowest level since November 2013. The net percent of owners expecting better business conditions has fallen 55 points over the past four months.

“As Congress debates another stimulus package, small employers welcome any additional relief that will provide a powerful fiscal boost as their expectations for the future are uncertain,” said NFIB chief economist Bill Dunkelberg. “The COVID-19 pandemic continues to dictate how small businesses operate and owners are worried about future business conditions and sales.”

Four of the ten Index components declined, two improved, and four were unchanged.

The NFIB Uncertainty Index decreased two points to 80.

Sales expectations for the next three months declined two points to a net negative 6%.

Earnings trends over the past three months declined two points to a net negative 16% reporting higher earnings compared to the prior period.

NFIB’s monthly jobs report showed job growth continued in January. Firms increased employment by 0.36 workers per firm on average over the past few months, up from 0.30 in December, a strong 2-month performance. However, the hiring remains uneven geographically and by industry.

Fifty-one percent of owners reported hiring or trying to hire in January, unchanged from December. Owners have plans to fill open positions, with a seasonally adjusted net 17% planning to create new jobs in the next three months.