Economic Buzz: US small business morale improves again, labor quality top concern; NFIB reports
The NFIB Small Business Optimism Index rose 0.5 points to 100.8 in August. Economists were looking for a higher score of 101. The latest reading is about 3 points above the 52-year average of 98.
Among the main components of the headline index, four increased, four decreased, and two were unchanged.
A net 12 percent of business owners expect higher real sales volume ahead. The ratio was 6 points higher from July and contributed the most to the increase in the headline index.
The uncertainty Index dropped 4 points to 93, thanks to a decrease in uncertainty about financing expectations and planned capital expenditures.
The NFIB survey also showed that unfilled job openings declined by a point to 32 percent in August, which was the weakest since July 2020.
The difficulty in filling open positions was most severe in the construction industry, where 49 percent of businesses had a job opening, they could not fill. Manufacturing and transportation sectors were also faced with labor shortages, while openings were the lowest in the wholesale and finance industries.
The share of small business owners reporting labor quality as their main concern remained at 21 percent, continuing to rank as the top problem, the industry lobby said.
That said, hiring intentions improved in August with 15 percent of business owners planning to create new jobs in the next three months, up 1 point from July and the third consecutive monthly increase. Though this is a positive trend, it was historically low, the NFIB observed.
The survey also showed that a net 26 percent of small businesses plan to hike prices in the next three months, down two points from July.
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