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National Federation of Independent Business (NFIB) index fell to
90.7 in October from September’s 90.8. The fall keeps the index
below its 50-year average of 98 for the 22nd-straight month as
the net share of businesses reporting higher profits fell 8
points from September to a net negative 32%.
After reaching its high for the year in July, small business
optimism has been eroding since August on concerns of a
tightening labor market and inflation. Respondents reporting
reduced profits are most frequently citing weakening sales and
higher input costs.
“The October data shows that small businesses are still
recovering, and owners are not optimistic about better business
conditions," said Bill Dunkelberg, the NFIB's chief economist.
"Small business owners are not growing their inventories as
labor and energy costs are not falling, making it a gloomy
outlook for the remainder of the year.”
As the Federal Reserve’s rate hike cycle slows, economic
uncertainty persists for small businesses who’ve faced higher
borrowing costs over the year. Mixed projections surrounding the
possibility of a future recession also continue to impact the
business outlook.
On a six-month basis, the share of owners expecting better
business conditions remained unchanged after falling 6 points to
a net negative 43% in September. In addition, 23% of business
owners listed tight labor conditions as a top concern, while 22%
of respondents listed inflation.
Businesses in the construction, transportation, and services
sectors experienced labor shortage as a difficulty most often,
while owners in the finance and retail sectors experienced the
most acute price hikes.
(Reporting by Amina Niasse; Editing by Andrea Ricci)
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