US Small-Business Optimism Hits 11-Year Low

(Bloomberg) — US small-business optimism dropped to a more than 11-year low in March as sales expectations slumped and inflationary pressures remained a trouble spot, according to the National Federation of Independent Business.

The index of sentiment fell 0.9 point to 88.5, the lowest level since the end of 2012, the NFIB said Tuesday. It marked the seventh decline in the last eight months.

“Owners continue to manage numerous economic headwinds,” Bill Dunkelberg, the group’s chief economist, said in a statement. “Inflation has once again been reported as the top business problem on Main Street and the labor market has only eased slightly.”

The net share of small firms expecting higher inflation-adjusted sales in the next six months slid 8 percentage points to minus 18%, the lowest since May. Credit conditions also deteriorated, and smaller shares of firms said now was a good time to expand or make capital outlays.

The group’s labor market gauges, released on Thursday by the NFIB, showed the share of small-business owners who plan to add jobs fell for a fourth month. Some 11% of firms said they intend to add workers in the next three months on net, down a percentage point and the smallest share since May 2020.

A net 28% said they raised prices compared to three months ago, the largest share since October, while plans to boost them also increased.

One in four small-business owners said inflation was the most important problem in operating their companies, while 18% said it was the quality of labor.

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