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The National Federation of Independent Business (NFIB) said its
Small Business Optimism Index rose 0.4 point to 89.4 last month.
It was the 17th straight month that the index stayed below the
49-year average of 98.
The share of owners expecting better business conditions over
the next six months slipped one point to a net negative 50%. A
net negative 21% expected higher inflation-adjusted sales, down
two points from April.
Twenty-five percent of small business owners reported that
inflation was their single most important problem, up two points
from April. The share was, however, 12 points lower than last
July's peak, which was the highest reading since the fourth
quarter of 1979.
Despite the persistent worries about inflation, price pressures
are subsiding as the aggressive interest rate hikes delivered by
the Federal Reserve since March of 2022 cool demand.
Government data on Tuesday is expected to show the Consumer
Price Index rose 0.2% in May after an increase of 0.4% in April,
according to a Reuters survey of economists. In the 12 months
through May, the CPI is forecast to climb 4.1%. That would be
the smallest year-on-year gain since March of 2021 and would
follow a 4.9% advance in April.
Economists expect the Fed will keep its policy rate unchanged on
Wednesday for the first time in more than a year.
The NIFB survey showed 44% of owners reported job openings that
were hard to fill, down a point from April. A net 19% planned to
create new jobs in the next three months, up two points from
April. About 63% reported hiring or trying to hire in May, up 3
points from April.
Strong hiring by small businesses partially explains the labor
market's resilience. The government reported this month that
nonfarm payrolls increased by 339,000 jobs in May.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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