NFIB’s Small Business Optimism Index Declines in November; Pessimistic Outlook for 2024

The National Federation of Independent Business (NFIB), one of the largest small business associations in the US, released on Tuesday (12-12-23) its latest NFIB Small Business Optimism Index (SBOI). According to the report, the November SBOI declined 0.1 points to a reading of 90.6. This marks the twenty-third consecutive month that the SBOI has been below the 49-year average reading of 98. The last time the Index was at or above the average was December 2021.

In November, 22% of small business owners reported that inflation was still their single most important business problem—unchanged from September but down 10 points year-over-year.

Other key highlights of the SBOI include the following:

  • Small business owners expecting better business conditions over the next six months increased 1 point from October to a net negative 42%, seasonally adjusted.
  • A net negative 17% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, unchanged from October and remaining at the lowest reading since July 2020.
  • Seasonally adjusted, 40% of owners reported job openings that were hard to fill, down 3 points from October but still historically high.
  • Seasonally adjusted, a net 30% of small business owners planned to raise compensation in the next three months, up 6 points from October and the highest level since December 2021.
  • The net percentage of owners raising average selling prices decreased 5 points from October to a net 25%, seasonally adjusted.
  • The net percentage of owners who expect real sales to be higher increased 2 points from October to a net negative 8%.

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

“Job openings on main street remain elevated as the economy saw a strong third quarter. However, even with the growing economy, small business owners have not seen a strong wave of workers to fill their open positions. Inflation also continues to be an issue among small businesses.”

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