NFIB’s Small Business Optimism Index Declines Slightly in January

The National Federation of Independent Business (NFIB), one of the largest small business associations in the U.S., reported today (2-08-22) that their NFIB Small Business Optimism Index decreased slightly in January to 97.1, down -1.8 points from December. For the month of January, of the ten components that make up the Index, one improved, while seven declined and two were unchanged.

Inflation remains a problem for small businesses as 22% of owners reported that inflation was their single most important business problem, unchanged from December when it reached the highest level since 1981.

The net percent of owners raising average selling prices increased four points to a net 61% (seasonally adjusted), the highest reading since the fourth quarter of 1974.

Owners expecting better business conditions over the next six months increased two points to a net negative 33%. Small business owners remain pessimistic about future economic conditions as this indicator has declined -13 points over the past six months.

Forty-seven percent of owners reported job openings that could not be filled, a decrease of two points from December.

Inventory accumulation plans fell five percentage points.

In remarks prepared for the release of the January Index, NFIB Chief Economist Bill Dunkelberg said, “More small business owners started the New Year raising prices in an attempt to pass on higher inventory, supplies, and labor costs. In addition to inflation issues, owners are also raising compensation at record high rates to attract qualified employees to their open positions.”