Small Business Optimism Rose to 93.7 in July

Washington, DC, August 13, 2024-The NFIB Small Business Optimism Index rose 2.2 points in July to 93.7, the highest reading since February 2022. However, this is the 31st consecutive month below the 50-year average of 98. Inflation remains the top issue among small business owners, with 25% reporting it as their single most important problem in operating their business, up four points from June.

“Despite this increase in optimism, the road ahead remains tough for the nation’s small business owners,” said NFIB chief economist Bill Dunkelberg. “Cost pressures, especially labor costs, continue to plague small business operations, impacting their bottom line. Owners are heading towards unpredictable months ahead, not knowing how future economic conditions or government policies will impact them.”

Key findings include:

• Seasonally adjusted, a net 33% reported raising compensation in July, down five points from June and the lowest reading since April 2021.
• A net 2% (seasonally adjusted) of owners plan inventory investment in the coming months, up four points from June. The last time inventory investment plans were positive was in October 2022.
• The net percent of owners expecting higher real sales volumes rose four points in July to a net negative 9% (seasonally adjusted), the highest reading of this year.
• The net percent of owners raising average selling prices fell five points from June to a seasonally adjusted net 22%.
• Seasonally adjusted, a net 24% plan price hikes in July (down two points). This is the lowest reading since April 2023.
• Thirty-eight percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up one point from June.