Labor Shortages Slow Business Growth in May

The National Federation of Independent Business (NFIB), reported today (6-8-21) that the NFIB Small Business Optimism Index fell -.02 points in May to a reading of 99.6. In May, there was a slight pause in the recovery of small business optimism after steadily improving from January through April 2021. In May a record-high number of business owners (48%) reported unfilled job openings. Other key findings in the report are: 1) Five of the 10 Index components improved, three declined, and two were unchanged. 2) The NFIB Uncertainty Index decreased one point to 79. 3) Job creation plans over the next three months rose to a net 27%, up six points. 4) Owners expecting better business conditions over the next six months fell -11 points to a net negative 26%. 5) Earnings trends over the past three months declined four points to a net negative 11%.

In a statement prepared for the Optimism Index release, Bill Dunkelberg, NFIB Chief Economist said, “The labor shortage is holding back growth for small businesses across the country. If small business owners could hire more workers to take care of customers, sales would be higher and getting closer to pre-COVID levels. In addition, inflation on Main Street is rampant and small business owners are uncertain about future business conditions.”