Inflation Continues to be a Top Concern for Small Business Owners

Date: May 14, 2024

The April Small Business Economic Trends survey shows a slight increase in the Optimism Index despite cost pressures.

In NFIB’s monthly Small Business Economic Trends survey, small business owners reported inflation as a top concern as cost increases have meant an increase in compensation to attract more employees. Despite cost pressures, the Small Business Optimism Index rose by 1.2 points in April to 89.7, the first increase of 2024, yet remains below the 50-year average of 98 for the 28th consecutive month.  The last time the index was at or above the average was in December 2021. 

Cost pressures remain the top issue for small business owners, including historically high levels of owners raising compensation to keep and attract employees,” said Bill Dunkelberg, NFIB Chief Economist. “Overall, small business owners remain historically very pessimistic as they continue to navigate these challenges. Owners are dealing with a rising level of uncertainty but will continue to do what they do best – serve their customers.” 

Key findings of the report include: 

  • Small business owners expecting better business conditions over the next six months improved six points from November to a net negative 36% (seasonally adjusted), and 25 percentage points better than last June’s reading of a net negative 61%. 
  • Seasonally adjusted, a net 29% of owners plan to raise compensation in the next three months, down one point from November. 
  • The net percent of owners raising average selling prices was unchanged from November at a net 25% (seasonally adjusted). 
  • The net percent of owners who expect real sales to be higher improved four points from November to a net negative 4% (seasonally adjusted), the highest reading since January 2022. 

As reported in the April jobs report, owners’ plans to fill open positions reversed the trend with a seasonally adjusted net 12% planning to create new jobs in the next three months, up one point from March’s lowest level since May 2020.   

The full Small Business Economic Trends report and the NFIB Jobs Report are available for further analysis.  

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