Small Business Optimism Rose to 90.5 in May

Washington, DC, June 11, 2024- The NFIB Small Business Optimism Index reached the highest reading of the year in May at 90.5, a 0.8-point increase but still the 29th month below the historical average of 98. The Uncertainty Index rose nine points to 85, the highest reading since November 2020. Twenty-two percent of owners reported that inflation was their single most important problem in operating their business, unchanged from April and the top business problem among owners.

“The small business sector is responsible for the production of over 40% of GDP and employment, a crucial portion of the economy,” said NFIB chief economist Bill Dunkelberg. “But for 29 consecutive months, small business owners have expressed historically low optimism and their views about future business conditions are at the worst levels seen in 50 years. Small business owners need relief as inflation has not eased much on Main Street.”

Key findings include:

* A net negative 8% (seasonally adjusted) of owners viewed current inventory stocks as “too low” in May, down four points from April and the lowest reading since October 1981.

* Owners’ plans to hire rose three points in May to a seasonally adjusted net 15%, the highest reading of the year.

* Seasonally adjusted, a net 28% plan price hikes in May, up two points from April.

* Six percent of owners reported that financing was their top business problem in May, up two points from April. The last time financing as a top business problem was this high was in June 2010.