NFIB Small Business Optimism Index Declines in October

The National Federation of Independent Business (NFIB), one of the largest small business associations in the US, reported on Tuesday (11-14-23) its latest NFIB Small Business Optimism Index (SBOI). The October SBOI declined 0.1 points to a reading of 90.7—the 22nd consecutive month that the index has been below the 49-year average of 98. The last time the Index was at or above the average was December 2021.

In October, 22% of small business owners reported that inflation was still their single most important business problem, down 1 point from September.

Other highlights of the SBOI include the following:

  • Small business owners expecting better business conditions over the next six months were unchanged from September at a net negative 43%, seasonally adjusted.
  • A net negative 17% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down nine points from September and the lowest reading since July 2020.
  • Seasonally adjusted, 43% of owners reported job openings that were hard to fill, unchanged from September and remaining historically high.
  • Seasonally adjusted, a net 24% of small business owners planned to raise compensation in the next three months, up one point from September.
  • The frequency of reports of positive profit trends was a net negative 32%, down eight points from September.
  • The net percentage of owners who expect real sales to be higher increased three points from September to a net negative 10%

Commenting on the release of the October SBOI, NFIB Chief Economist Bill Dunkelberg said:

“This month marks the 50th anniversary of NFIB’s small business economic survey. The October data shows that small businesses are still recovering, and owners are not optimistic about better business conditions. Small business owners are not growing their inventories as labor and energy costs are not falling, making it a gloomy outlook for the remainder of the year.”

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