NFIB Small Business Optimism Index Declines in August

The National Federation of Independent Business (NFIB), one of the largest small business associations in the US, reported on Tuesday (9-12-23) its Small Business Optimism Index (SBOI) for August. According to the report, the SBOI declined 0.6 points to a reading of 91.3 in August—the twentieth consecutive month below the 49-year average reading of 98. The last time the Index was at or above the average was December 2021.

In August, 23% of small business owners reported that inflation was their single most important business problem, up two points from July. The net percentage of owners raising their average selling prices increased two points to a net 27% (seasonally adjusted), still at an inflationary level.

Other highlights of the SBOI include the following:

• Small business owners expecting better business conditions over the next six months fell 7 points from July to a net negative 37%. That is 24 percentage points better than last June’s reading of a net negative 61% but still at recession levels.
• The net percentage of owners who expect real estate sales to be higher decreased two points from July to a net negative 14%.
• Forty percent of owners reported job openings that were hard to fill, down two points from July but remaining historically high.

Adding additional background and analysis to the release of the August SBOI, NFIB Chief Economist Bill Dunkelberg said:

“With small business owners’ views about future growth and business conditions discouraging, owners want to hire and make money now from strong consumer spending. Inflation and the worker shortage continue to be the biggest obstacles for Main Street.”