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March 25, 2024

Inflation Top Concern for Small Businesses

Inflation has replaced labor quality as the top concern in the latest National Federation of Independent Business (NFIB) Small Business Optimism Index.

In February, 23 percent of small business owners reported that inflation was their single most important problem in operating their business, an increase of three points from the previous month. Labor quality, meanwhile, fell five points to 16 percent. Overall, the index decreased to 89.4 for February, marking 26 consecutive months below the 50-year average of 98.

“While inflation pressures have eased since peaking in 2021, small business owners are still managing the elevated costs of higher prices and interest rates,” NFIB Chief Economist Bill Dunkelberg said. “The labor market has also eased slightly as small business owners are having an easier time attracting and retaining employees.”

Other key findings in the monthly report include:

  • The net percentage of owners who expect real sales to be higher increased six points from January to a net negative of 10 percent.
  • Small business owners’ plans to fill open positions continue to slow, with 12 percent planning to create new jobs in the next three months, the lowest level since May 2020.
  • Thirty-seven percent of all owners reported job openings they could not fill in the current period, down two points from January and the lowest reading since January 2021.
  • The net percent of owners raising average selling prices declined one point from January to a net 21 percent (seasonally adjusted), the lowest reading since January 2021.

The full NFIB Small Business Optimism Index is available here.


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