November Jobs Report Shows Continuing Tight Labor Market, Wait and See Approach on Economy

December 19, 2023

Inflation and labor quality continue to be top concerns as 40% of small business owners reported unfilled jobs

November Jobs Report Shows Continuing Tight Labor Market, Wait and See Approach on Economy

Small business owners are pessimistic about future business conditions. In NFIB’s Small Business Economic Trends November survey, the NFIB Small Business Optimism Index decreased 0.1 points to 90.6. This is the 23rd consecutive month below the 50-year average of 98. The last time the Index was at or above the average was December 2021. “Despite the slight decline in November, small business job openings remain stuck in historical territory,” said NFIB Chief Economist Bill Dunkelberg. “For owners across the country, there are not enough workers to maintain current operations for small businesses, much less chase new opportunities. As we near the end of the year, small business owners continue to raise compensation in order to attract and retain qualified employees.” Key findings of the report include:

Owners expecting better business conditions over the next six months increased one point from October to a net negative 42% (seasonally adjusted).
A net negative 17% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, unchanged from October and the lowest reading since July 2020.
Forty percent (seasonally adjusted) of owners reported job openings that were hard to fill, down three points.
Seasonally adjusted, a net 30% of owners plan to raise compensation in the next three months, up six points from October and the highest since December 2021.
The net percent of owners raising average selling prices decreased five points from October to a net 25% (seasonally adjusted).
The net percentage of owners who expect real sales to be higher increased two points from October to a net negative 8% (seasonally adjusted).

As reported in NFIB’s monthly jobs report, owners’ plans to fill open positions remain elevated with a seasonally adjusted net 18% planning to create new jobs in the next three months. Overall, 54% reported hiring or trying to hire in November. Of those hiring or trying to hire, 93% of owners reported few or no qualified applicants for the positions they were trying to fill. The net percentage of owners reporting inventory gains increased three points to a net negative 3%. Not seasonally adjusted, 14% reported increases in stocks and 16% reported reductions. A net 0% of owners viewed current inventory stocks as “too low” in November, up three points from October. By industry, shortages are reported most frequently in the retail (14%), finance (13%), and services (10%) sectors. Shortages in construction (8%) have been reduced because home sales have slowed dramatically due to higher interest rates. A net negative 3% of owners plan inventory investment in the coming months. The net percentage of owners raising average selling prices decreased five points from October to a net 25% seasonally adjusted. Twenty-two percent of owners reported that inflation was their single most important problem in operating their business, unchanged from last month. Unadjusted, 14% reported lower average selling prices and 36% reported higher average prices. Seasonally adjusted, a net 36% of owners reported raising compensation, unchanged from October. A net 30% (seasonally adjusted) plan to raise compensation in the next three months, up six points from October and the highest reading since December 2021. Eight percent of owners cited labor costs as their top business problem. A net negative 17% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, remaining the lowest reading since July 2020. The net percentage of owners expecting higher real sales volumes improved two points to a net negative 8%. The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in September 2023. The full Small Business Economic Trends report along with the NFIB Jobs Report are available for further analysis.

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