NFIB Small Business Optimism Index Declines in September, Remaining Below 49-Year Average

The National Federation of Independent Business (NFIB), one of the largest small business associations in the US, released on Tuesday (10-10-23) its latest Small Business Optimism Index (SBOI). According to the report, the September SBOI declined 0.5 points to a reading of 90.8—the 21st consecutive month below the 49-year average of 98. The last time the Index was at or above the average was December 2021.

In September, 23% of small business owners reported that inflation was their single most important business problem, unchanged from August and tied with labor quality as the top concern.

Other key highlights of the SBOI include the following:

• Small business owners expecting better business conditions over the next six months declined 6 points from August to a net negative 43%, seasonally adjusted. That is 18 percentage points better than last June’s reading of a net negative 61% but still at recession levels.
• Seasonally adjusted, 43% of owners reported job openings that were hard to fill, up 3 points from August and remaining historically high as owners struggle to hire enough workers due to few qualified applicants.
• The net percentage of owners who expect real sales to be higher increased 1 point from August to a net negative 13%, seasonally adjusted, still a very dismal perspective.
• The net percentage of owners raising their average selling prices increased 2 points to a net 29%, seasonally adjusted, still a very inflationary level.

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

“Owners remain pessimistic about future business conditions, which has contributed to the low optimism they have regarding the economy. Sales growth among small businesses have slowed and the bottom line is being squeezed, leaving owners few options beyond raising selling prices for financial relief.”