Small Business Optimism Index Rose 1.9 Points in August

Washington, DC, September 13, 2022-The NFIB Small Business Optimism Index rose 1.9 points in August to 91.8, marking the eighth consecutive month below the 48-year average of 98 but reversing some of the declines in the first half of the year. Twenty-nine percent of owners reported that inflation was their single most important problem in operating their business, a decrease of eight points from July’s highest reading since the fourth quarter of 1979.

“The small business economy is still recovering from the pandemic while inflation continues to be a serious problem for owners across the nation,” said NFIB chief economist Bill Dunkelberg. “Owners are managing the rising costs of utilities, fuel, labor, supplies, materials, rent, and inventory to protect their earnings. The worker shortage is impacting small business productivity as owners raise compensation to attract better workers.”

Key findings include:

* Small business owners expecting better business conditions over the next six months improved ten points from July to a net negative 42%, the highest level since February 2022, but a dismal outlook.

* The net percent of owners raising average selling prices decreased three points to a net 53% (seasonally adjusted), still a very inflationary outcome.

* The net percent of owners who expect real sales to be higher increased ten points from July to a net negative 19%, but owners still want to hire.

* The Uncertainty Index increased seven points to 74.

As reported in NFIB’s monthly jobs report, 49% of owners reported job openings that were hard to fill, unchanged from July and remaining historically high. Owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 21% planning to create new jobs in the next three months.