Small business owner optimism reaches six-month high

Small business owner optimism reached its highest reading of the year in June, according to the National Federation of Independent Business. .The NFIB Small Business Optimism Index increased one point to 91.5, its highest mark since 91.9 in December 2023. The index has been below its historical average of 98 for 2 1/2 straight years. Inflation remained the most pressing small business issue as 21 percent of owners cited inflation as their top issue in operating their business, down one point from May. .The labor market remained tight. Sixty percent of owners were either hiring or trying to hire last month, and most of them (85 percent) reported few or no qualified applicants. A seasonally adjusted 37 percent of small business owners had job openings they could not fill in June, down five points from the previous month. A net 22 percent plan to raise compensation in the next three months, a four-point increase from May. .A net negative 12 percent of owners in June had higher nominal sales in the past three months, while the net percent of owners predicting higher real sales volumes remained at a net negative 13 percent..Fifty-two percent made capital outlays in the last six months, down six points from May and its lowest reading in nearly two years. Of those, 35 percent spent on new equipment, 22 percent acquired vehicles and 14 percent improved or expanded facilities. Twenty-three percent expect capital outlays in the next six months, unchanged from May.."Main Street remains pessimistic about the economy for the balance of the year," said NFIB Chief Economist Bill Dunkelberg. "Increasing compensation costs has led to higher prices all around. Meanwhile, no relief from inflation is in sight for small business owners as they prepare for the uncertain months ahead."