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The National Federation of Independent Business (NFIB) said its
Small Business Optimism Index dropped 1.1 points to 89.0 last
month. It was the 16th straight month that the index remained
below the 49-year average of 98.
The share of owners expecting better business conditions over
the next six months fell two points to a net negative 49%. A net
negative 19% expected higher inflation-adjusted sales, down four
points from March.
Higher interest rates tied to the Federal Reserve's battle to
tame inflation combined with tighter credit conditions following
recent financial market stress are stoking fears of a recession
this year. A fight over raising the federal government's
borrowing cap is also helping to cloud the economy.
Though the U.S. central bank has signaled it may pause its
fastest monetary policy tightening campaign since the 1980s, the
economy has yet to feel the full effects of the cumulative 500
basis points of hikes in the policy rate since March 2022.
Forty-five percent of owners reported job openings that they
could not fill, up 2 points from March. The vacancies were
concentrated in construction, despite higher mortgage rates, and
transportation. Thirty-seven percent of the owners had vacancies
for skilled workers, up three points from March.
The government reported last week that there were 1.6 job
openings for every unemployed person in March.
The share of small business owners reporting that inflation was
their single most important problem dipped one point to 23%, and
was 14 points lower than last July's peak, which was the highest
reading since the fourth quarter of 1979.
About 33% of owners reported raising average selling prices,
down 4 points. Government data on Wednesday is expected to show
consumer prices increased strongly in April, but services costs
outside housing are forecast to have risen moderately.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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