That strength is due at least in part to a resilient labor market and low unemployment that’s given workers some cash to spend. Indeed, the latest gross domestic product report from the Bureau of Economic Analysis showed that consumer spending still drove much of the increase in U.S. economic growth in the second quarter, even though spending did decelerate from the first quarter overall. “With small business owners’ views about future sales growth and business conditions dismal, owners want to hire and make money now from solid consumer spending,” said Bill Dunkelberg, the NFIB’s chief economist, in the press release. This reading remained below 40% from 2018 to 2020.īusiness owners expecting higher real sales improved by two percentage points to a net negative 12%, but the report still deemed this “a very dismal posture.” Likewise, the number of business owners expecting better business conditions in the next six months increased by 10 percentage points in July-after a 10-point bump up in June, as well-but was still “historically very negative” at a net negative 30%, according to the report.Īnd yet, if business owners turn their attention toward consumers, they could find more encouragement. Meanwhile, 42% of business owners said they had job openings they couldn’t fill, the same as in June. For some context, this reading did not exceed 20% in any month from 2018 to 2020. The net percentage of business owners hiking prices fell to its lowest level since January 2021 at a net 25%, but this remains inflationary. Last month, inflation and labor quality tied as the top concern for small business owners, but responses in both categories eased up in July: 21% of business owners listed inflation as their top concern and 23% listed labor quality, down from 24% for both in June.īut a closer look reveals still historically high readings on both fronts. However, the federation still expects to see a comparatively strong third quarter, even as small business optimism fades.Indeed, the latest NFIB report reveals both signs of progress and the still-present challenges that plague business owners in this uncertain economic environment. Although the NFIB notes that entrepreneurs were nevertheless successful in the first six months of 2023, uncertainty about the future abounds as rising inflation, interest rate hikes and worsening access to capital threaten to negate early-year gains. Entrepreneurs also struggled to build inventories over the month, with supply increases dropping four percent from July.Īs indicated by the index, small business owners are facing increased hardship stemming from economic headwinds, a product of the COVID pandemic. The NFIB notes that 40% of small business owners surveyed in August were unable to fill an open position, although 17% expressed interest in ramping up hiring efforts between September and November. Other trends, including hiring difficulties and tightening access to capital, continued to progress throughout the month. The NFIB also reported a significant shift in overall sales and revenue expectations, with positive six-month performance forecasts declining seven percent month-over-month. The number of participants chiefly concerned about rising inflation rose two points to 23% over the course of August. entrepreneurs, showed a 0.6-point decline from July to 91.3, marking the 20th consecutive month that scores have remained below the near-50-year average of 98. The organization’s Small Business Optimism Index, a quarterly survey of U.S. Rising consumer prices drove small business optimism down in August, according to a report from the National Federation of Independent Business (NFIB).
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