The National Federation of Independent Business (NFIB) released its Small Business Optimism Index for December, which declined 2.1 points to a reading of 89.8, below expectations of 91.5 and marking the 12th straight month below the 49-year average of 98.
The share of small business owners expecting better business conditions over the next six months fell 8 points from November to a net negative 51%, with inflation identified as the single most important business problem for roughly one-third or 32% of owners. Another 23% said that labor quality was their top business problem, with 8% of owners citing rising labor costs as their top business problem.
Expectations that sales would improve also worsened 2 points from November to a negative 10%. A negative 8% of all owners reported higher sales in the past three months, down 1 point from November.
“Overall, small business owners are not optimistic about 2023 as sales and business conditions are expected to deteriorate,” said NFIB Chief Economist Bill Dunkelberg in a release.