Small Business Outlook Worsens in December

High inflation and rising labor costs remain the top concerns for small business owners

Small Business/Coffee Shop Owner

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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. 

Small Business Optimism Index (2010-2022)

National Federation of Independent Business (NFIB)

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