Small business optimism on the rise despite inflation concerns, but hiring challenges remain

by | Aug 8, 2023

  • NFIB Small Business Optimism Index increased 0.9 points to 91.9 in July, but remains below the 49-year average of 98.
  • Inflation is a top concern for 21% of small business owners, but this figure dropped three points since June.
  • Expectations for improved business conditions over the next six months rose nationally, but 42% of business owners still reported difficulties in filling job positions.

Consistent with national news of improving consumer confidence, new data also reveals an uptick in small business optimism across the nation. The NFIB Small Business Optimism Index reported an increase of 0.9 points to 91.9 in July, marking its 19th consecutive month below its 49-year average of 98. Notably, while 21% of business owners noted inflation as a top concern, this figure has dropped three points since June.

“With views on future sales growth and overall business conditions being negative, small business owners are eager to capitalize on the current consumer spending,” remarked NFIB Chief Economist Bill Dunkelberg. “Although inflation has somewhat relaxed on Main Street, hiring continues to pose significant challenges for businesses.”

Florida-specific details were not included in the report. However, NFIB Florida Executive Director Bill Herrle noted the survey was encouraging.

“Higher prices are affecting Florida families and driving up costs for small business operations,” Herrle said. “Although we’re not yet where we want to be, the latest data suggests a positive directional shift, especially concerning inflation.”

The national NFIB report comes on the heels of a less upbeat Florida consumer confidence report yesterday that painted a different picture at the state level. Consumer confidence in Florida saw a 2.1 point drop in July, even with a stable unemployment rate and a burgeoning labor force. The report attributed the decline to Floridians’ uncertainty about national economic conditions and their own spending intentions. The pessimism was especially pronounced among individuals earning under $50,000 annually. The sour note from Florida comes as U.S. consumer sentiment has recently soared, reaching its highest level in nearly two years.

And among small business owners, at least nationally, expectations for improved business conditions over the next six months rose 10 points from June, the NFIB report said. Fewer business owners reported raising their prices this month – the net percentage decreased four points to 25%, which is the lowest since January 2021. On the downside, NFIB said that 42% of business owners have reported difficulties in filling job positions, a statistic that remains historically high.

It remains to be seen how the contrasting trends between Florida’s consumer confidence versus the national mood in both consumer sentiment and small business optimism will play out in the coming months.


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