The NFIB’s Small Business Optimism Index Declined Again in December

The National Federation of Independent Business (NFIB), one of the largest small business associations in the US, reported on Tuesday (1-10-23) its NFIB Small Business Optimism Index (SBOI) for December 2022. According to the report, the December SBOI declined 2.1 points to a reading of 89.8—the twelfth consecutive month that the SBOI has been below the 49-year average reading of 98.

Owners expecting better business conditions over the next six months declined by 8 points from their November reading to a net negative 51%. Inflations remains the single most important problem with 32% of owners reporting it as their top problem in operating their business.

Other highlights of the SBOI include:

  • Forty-one percent of business owners reported job openings that were hard to fill, down three points from November but still historically high.
  • The net percentage of owners who expect real sales to be higher decreased 2 points from November to a net negative 10%.
  • The net percent of owners raising average selling prices dropped 8 points to net 43% (seasonally adjusted), a historic high.

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

“Overall, owners are not optimistic about 2023, sales and business conditions are expected to deteriorate. Owners will focus on their businesses and do their best to deal with the fallout from all of the uncertainties in a year of slow growth and still-persistent inflation.”

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