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The
National Federation of Independent Business (NFIB) said its
Small Business Optimism Index dipped 0.1 point last month to
93.1. The share of owners expecting better business conditions
over the next six months hit a record low.
Expectations for better business conditions have deteriorated
every month since January. Inflation remained the biggest
challenge.
High inflation has prompted an aggressive response from the U.S.
Federal Reserve, leaving investors worrying about a protracted
period of very slow growth or even a recession next year. The
central bank is expected to raise its policy interest rate by
another 50 basis points at the end of a two-day meeting on
Wednesday. The Fed has increased the overnight rate by 75 basis
points since March.
The NFIB survey showed 51% of businesses reported job openings
they could not fill, up four points from April. The vacancies
were for both skilled and unskilled labor, with worker shortages
most acute in the construction, manufacturing, retail, and
wholesale industries. Small business job openings are more than
20 percentage points higher than the historical average.
The government reported early this month that there were 11.4
million job openings across the economy at the end of April. The
Fed is trying to cool demand for labor, without driving the
unemployment rate too high.
Despite the acute worker shortage, the appetite for wage
increases is waning. About 46% of small business owners reported
raising compensation, down three points from April. A quarter
planned to do so in the next three months, down two points from
April, but still a historically very high share.
(Reporting by Lucia Mutikani; Editing by David Gregorio)
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