News
Inflation · Labor Costs · Optimism · Small Business
The NFIB Small Business Optimism Index declined 0.6 points to 95.3 in May, remaining below its 52-year average of 98.0, as small business owners reported increased struggles with inflation, labor costs, and supply chain disruptions.
The Uncertainty Index rose three points to 91, significantly above its historical average of 68. NFIB chief economist Bill Dunkelberg noted that while AI investment generates excitement, the overall picture is divided, with small businesses struggling to pass on fuel price hikes compared to larger competitors.
Key findings from the NFIB report indicate the Employment Index remained flat at 100.3, below the 2025 average of 101.2. Job openings and hiring plans fell to their lowest levels since May 2020, with 29% of owners reporting unfilled positions, down five points from April.
A net 9% of owners plan to create new jobs, the lowest since May 2020. Labor quality concerns decreased to 13%, the lowest since December 2016, but labor costs became the single most important problem for 14% of owners, the highest reading in the survey's history.
Capital outlay plans dropped to 16%, the lowest since March 2009. Supply chain disruptions affected 70% of businesses, up six points.
Both actual and planned price increases rose significantly, with a net 36% of owners raising prices (highest since March 2023) and a net 34% planning increases (highest since July 2022). Inflation was cited as the second top problem by 18% of owners, the highest since December 2024.
