U.S. Small Business Outlook Improves Marginally, NFIB Index Shows
09 January 2024 - 10:29PM
Dow Jones News
By Ed Frankl
Confidence among U.S. small businesses improved slightly in
December, albeit remaining subdued as inflation concerns rose
again.
The National Federation of Independent Business said Tuesday
that its small-business optimism index rose to 91.9 in December
from 90.6 in November, better than expectations for a slight rise
to 90.8 according to economists polled by The Wall Street Journal
ahead of the release.
It marks the 24th straight month, or two-straight years, when
the index was below the 50-year average of 98, NFIB said.
Despite the mild improvement, small-business owners remain
pessimistic about economic prospects this year, according to NFIB
Chief Economist Bill Dunkelberg.
"Inflation and labor quality have consistently been a tough
complication for small business owners, and they are not convinced
that it will get better in 2024," he added.
A net of 23% of owners reported that inflation was their single
most important problem in operating their business, up one point
from November and overtaking labor quality as the top problem.
It comes despite U.S. consumers' expectations of inflation
falling to the lowest level in nearly three years, according to the
Federal Reserve Bank of New York. One-year inflation expectations
fell to 3% in December, from 3.4% in November's survey, it said
Monday.
Meanwhile, the index of small business owners expecting better
business conditions over the next six months improved six points in
December, albeit to a still-net negative 36%, NFIB said.
But finding staff continued to be an issue, with 40% of owners
reporting job openings they couldn't fill, according to NFIB's jobs
report.
Almost a third of owners--a net of 29%--plan to raise
compensation in the next three months, ticking down one point from
November, NFIB added.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
January 09, 2024 06:14 ET (11:14 GMT)
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