NFIB Small Business Optimism Index Falls in September

On Tuesday, the National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index (SBOI) fell 2.0 points to 98.8 in September. This was the first decline in three months, although the index remains above the 52-year average of 98.

The NFIB Uncertainty Index rose 7 points to 100, marking the fourth-highest reading in more than five decades.

Other key highlights from the September SBOI include:

• The net percent of owners raising average selling prices increased 3 points from August to a seasonally adjusted 24%. A net 31% (seasonally adjusted) plan to increase prices over the next three months, up 5 points from August.
• Fourteen percent of owners cited inflation as their single most important problem, up 3 points from August.
• Supply chain issues continued to weigh on operations, with 64% of owners reporting disruptions, up 10 points from August.
• A net negative 7% seasonally adjusted of owners viewed current inventory stocks as “too low,” down 7 points—the largest monthly decline in the survey’s history.
• Earnings trends improved, with the net percent of owners reporting higher profits rising 3 points to the highest level since December 2021.
• The net share of owners expecting better business conditions fell 11 points to a seasonally adjusted 23%.
• Eighteen percent of owners cited labor quality as their most important problem, down 3 points from August and tying with taxes as the top concern.

In remarks accompanying the release, NFIB Chief Economist Bill Dunkelberg said:

“Optimism among small business owners decreased in September. While most owners evaluate their own business as currently healthy, they are having to manage rising inflationary pressures, slower sales expectations, and ongoing labor market challenges. Although uncertainty is high, small business owners remain resilient as they seek to better understand how policy changes will impact their operations.”