In April, small-business confidence in the United States saw a slight increase, according to a survey released by the National Federation of Independent Business (NFIB). The Small Business Optimism Index rose by 1.2 points to 89.7 last month, rebounding slightly from a low in March. This marked the 28th consecutive month that the index remained below the 50-year average of 98.
Despite this optimism, labor shortages continued to be a challenge for small business owners, leading to cost pressures. Inflation was cited as the most significant problem for 22% of owners, down from the previous month. The proportion of businesses planning to raise prices decreased to 26%, the lowest level in a year, while those raising prices dropped to 25%.
Although there was optimism over slower price increases, the survey found that the share of owners increasing compensation remained high at 38%. Looking ahead, 21% of owners planned to boost compensation in the next three months. The NFIB also reported that 40% of owners had job openings they couldn’t fill in April, indicating ongoing challenges in finding and retaining qualified employees.
NFIB chief economist Bill Dunkelberg highlighted that cost pressures were the top concern for small business owners, especially as many had to raise compensation to attract and keep workers. Inflation had increased in the first quarter, but there were hopes that prices would start to decrease as the labor market cooled.
Financial markets are predicting that the Federal Reserve will begin easing its monetary policy in September, while some economists believe a rate cut could come as early as July. The Fed had previously left interest rates unchanged, but many are anticipating a shift in policy later in
