Small-business owners have never been more pessimistic about the future of the economy — no thanks to high inflation and talk of recession.
The share of small firms that expect business conditions to improve in the next six months fell in June to the lowest level on record, the National Federation of Independent Business said Tuesday.
The NFIB, the nation’s largest small-business lobbying group, has compiled the survey for 48 years.
“As inflation continues to dominate business decisions, small business owners’ expectations for better business conditions have reached a new low,” said NFIB Chief Economist Bill Dunkelberg.
The small-business optimism index more broadly fell 3.6 points to 89.5, the lowest level since the first few months of the pandemic in 2020. The index has declined in five of the past six months.
Small businesses once again identified high inflation as their biggest problem. Firms have raised prices to cover their own rising costs, but in many cases, not enough to maintain profit margins, the survey found.
The good news? Many small companies are still trying to hire, a sign that customer demand remains strong and that the economy hasn’t deteriorated all that much.
On Friday, the government said the U.S. added a better-than-expected 372,000 jobs in June in a signal the economy still has some zip left.
Finding workers has become increasingly hard, though. Lots of small businesses are raising wages to try to attract more workers, but in many cases they aren’t finding any takers, the survey found.
Some 50% of firms that reported job openings said they could not fill the positions. And 94% of those actively trying to hire found ” few or no qualified applicants,” the survey said.
U.S. stock futures
ES00,
traded lower on Tuesday. The S&P 500
SPX,
has lost 19% this year.
