The NFIB’s Small Business Optimism Index Trended Higher in June but Remains Below 50-year Average

The National Federation of Independent Business (NFIB), one of the largest small business associations in the U.S., reported on Tuesday (7-9-24), their NFIB Small Business Optimism Index (SBOI) for June 2024. According to the report, the June SBOI increased by 1.0 points to a reading of 91.5. The last time the SBOI was this high was in December 2023. Nevertheless, the improvement in the June reading is still below the 50-year average of 98.0, marking the 30th consecutive month of being below average.

In June, inflation was still the top small business concern, with 21% of owners reporting it as their single most important problem in operating their business, down one point from May.

Other key highlights of the SBOI include:

  • Seasonally adjusted, a net 22% plan to raise compensation in the next three months, up 4- points from May.
  • A net negative 2% (seasonally adjusted) of owners viewed current inventory stocks as “too low” in June, up 6-points from May’s lowest reading since October 1981.
  • A net negative 2% (seasonally adjusted) plan inventory investment in the coming months, up 4- points from May.
  • Fifty-two percent reported capital outlays in the last six months, down 6-points from May and the lowest reading since August 2022.
  • Four percent of owners reported that all their borrowing needs were not satisfied, up 1-point from May and the highest reading since August 2022.

Adding additional background to the release of the June SBOI, NFIB Chief Economist Bill Dunkelberg said, ““Main Street remains pessimistic about the economy for the balance of the year. Increasing compensation costs has led to higher prices all around. Meanwhile, no relief from inflation is in sight for small business owners as they prepare for the uncertain months ahead.”


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