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Home / News / Analysis /

Optimism Dips in January Amid Hiring Challenges and Uncertainty

Optimism Dips in January Amid Hiring Challenges and Uncertainty

February 19, 2025

The Small Business Optimism Index fell 2.3 points in January

What it means: The January Small Business Optimism Index fell 2.3 points to 102.8. Small business owners are feeling hopeful in the direction of the economy, but finding qualified applicants remains a top concern.

Our take: “Overall, small business owners remain optimistic regarding future business conditions, but uncertainty is on the rise. Hiring challenges continue to frustrate Main Street owners as they struggle to find qualified workers to fill their many open positions,” said NFIB Chief Economist Bill Dunkelberg.

The January Small Business Economic Trends report was released with small businesses remaining optimistic, but uncertainty is on the rise. Following December’s Optimism Index of 105.1, it decreased 2.3 points to 102.8. Inflation and labor quality remain the top issues among small business owners, with 18% reporting it as their top operating issue, down two points from December. Labor costs fell two points from December to 9%.

The Uncertainty Index rose 14 points to 100 – the third highest reading – after two months of decline. Small business owners are feeling less confident about investing in their business due to uncertain business conditions in the coming months.

Small firms continue to have high levels of job openings available. Thirty-five percent of all small business owners reported job openings they could not fill in January, unchanged from December. A net 33% (seasonally adjusted) plan to raise compensation in the next three months, up four points from December.

The full Small Business Economic Trends report and NFIB Jobs Report for January are now available.

Topics:
Economy
Labor
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