Small Business Optimism Declined to 89.4 in February

Washington, DC, March 12, 2024-The NFIB Small Business Optimism Index decreased in February to 89.4, marking the 26th consecutive month below the 50-year average of 98. Twenty-three percent of small business owners reported that inflation was their single most important business problem in operating their business, up three points from last month and replacing labor quality as the top problem.

“While inflation pressures have eased since peaking in 2021, small business owners are still managing the elevated costs of higher prices and interest rates,” said NFIB chief economist Bill Dunkelberg. “The labor market has also eased slightly as small business owners are having an easier time attracting and retaining employees.”

Key findings include:

* Reports of labor quality as the single most important problem for business owners decreased five points to 16%, the lowest reading since April 2020.

* The net percent of owners who expect real sales to be higher increased six points from January to a net negative 10% (seasonally adjusted), an improvement from last month.

* Small business owners’ plans to fill open positions continue to slow, with a seasonally adjusted net 12% planning to create new jobs in the next three months, the lowest level since May 2020.

* Thirty-seven percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, down two points from January and the lowest reading since January 2021.

* The net percent of owners raising average selling prices declined one point from January to a net 21% (seasonally adjusted), the lowest reading since January 2021.