Taxes become second-ranked concern as labor quality or availability stays first
On Nov. 10, the National Federation of Independent Business said its small-business optimism index slipped 0.1 point in October to 97.8. The reading remained just below the index’s 53-year average. “There was little change in optimism among small businesses in October as owners navigated enduring challenges, though there were some encouraging developments,” said NFIB Chief Economist Bill Dunkelberg.
The optimism index has declined for three consecutive months after reaching a multi-month high in July. Economists polled by The Wall Street Journal had expected an increase to 98.1 in October. The uncertainty index fell six points to 84, its lowest level since December, although it remained above its historical average of 68. Dunkelberg said more owners reported that their businesses were in good or excellent health and that actual sales improved.
The survey provides a monthly snapshot of small businesses across the United States, which account for nearly half of private-sector jobs. The Wall Street Journal said small businesses are often more sensitive than larger firms to sudden price fluctuations, higher interest rates and broader economic uncertainty.
Owners’ leading concerns shifted in October. About 25% of owners identified labor quality or availability as their single most important problem, down one point from September and the leading reported issue for a fourth consecutive month. Taxes moved into second place, replacing inflation as the second-most-cited problem. Taxes were named by 21% of owners, up 10 points from September and at the highest share since May 2021.
Forward expectations improved after two months of deterioration. A seasonally adjusted net 8% of owners expected better business conditions over the next six months, up two points from September and above the measure’s average.