NFIB Small Business Optimism Index Inches Higher in April, but Remains Below 50-Year Average

On Tuesday, the National Federation of Independent Business (NFIB), one of the largest small business associations in the US, released its NFIB Small Business Optimism Index (SBOI) for April. The SBOI increased 1.2 points in April to a reading of 89.7, marking the first increase of 2024 but the 28th consecutive month below the 50-year average of 98.0.

In April, 22% of owners reported that inflation was their single most important problem in their business. This is down 3 points from March, but it still remains the number one concern.

Other highlights of the April SBOI include the following:

• The net percentage of owners who expect real sales to be higher rose 6 points from March to a net negative 12% (seasonally adjusted).
• A seasonally adjusted net 12% of owners reported planning to create new jobs in the next three months, up 1 point from March’s lowest level since May 2020.
• A net 26% (seasonally adjusted) of owners plan price hikes, down 7 points and the lowest reading since April of last year.
• Seasonally adjusted, 40% of all owners reported job openings they could not fill in the current period—up 3 points from March, which was the lowest reading since January 2021.
• The net percentage of owners raising average selling prices fell 3 points from March to a net 25%, seasonally adjusted.

Commenting on the results of the SBOI, NFIB Chief Economist Bill Dunkelberg said,

“Cost pressures remain the top issue for small business owners, including historically high levels of owners raising compensation to keep and attract employees. Overall, small business owners remain historically very pessimistic as they continue to navigate these challenges. Owners are dealing with a rising level of uncertainty but will continue to so what they do best—serve their customers.”