NFIB’s August Small Business Economic Index Shows Uneven Main Street Recovery
The latest NFIB jobs report and small business optimism index show good news for the economy, yet uncertainty and finding qualified applicants to fill open positions, remain significant issues for small business owners.
As of August, a net 21% of small businesses plan to create jobs before the end of the year, the NFIB Optimism Index increased 1.4 points to 100.2, a reading slightly above the historical 46-year average; and the NFIB Uncertainty Index increased two points in August to 90, the second-highest reading since 2017.
“Small businesses are working hard to recover from the state shutdowns and effects of COVID-19,” said NFIB Chief Economist Bill Dunkelberg. “We are seeing areas of improvement in the small business economy, as job openings and plans to hire are increasing, but many small businesses are still struggling and are uncertain about what the future will hold.”
In addition to the good news on future job creation, a net 18% of owners reported raising compensation, up 3 points from July. A net 14% of owners plan to raise compensation in the coming months. These numbers, as well as the job creation numbers, are seasonally adjusted.
However, small businesses also reported several serious problems in August. Nine percent of owners cited labor cost as their top problem. And despite new plans to create jobs, thirty-three percent of owners reported job openings they could not fill in the current period, up 3 points.
Thirty-one percent of owners have job openings for skilled workers and 12% have job openings for unskilled labor. Twenty-six percent of owners reported few or no qualified applicants for their open positions and 20% reported none.
Up from July, 52% of owners reported hiring or trying to hire in August, and 88% of those reported few or no qualified applicants for the positions they were trying to fill. In construction, 50% of firms reported few or no qualified applicants and 41% cited the shortage of qualified labor as their top business problem.
Such serious issues show the need for Congress to take more action to spur a strong recovery and encourage more people to rejoin the workforce.
Specifically, Main Street needs Congress to pass another COVID-19 recovery bill.
Take action: Every NFIB member has a story that Congress needs to hear. Even if you have already reached out to your members of Congress on the issue of COVID-19 recovery – please contact them again with our pre-written message that you can personalize. Small businesses are struggling; tell Congress why they need to put aside disagreements and help save small businesses before the election.