Small business owners' expectations for the future fell to a 48-year low as owners report inflation continues to be their number one business problem, according to a survey by National Federation of Independent Business (NFIB).
The NFIB's Optimism Index fell 0.1 points in May to a reading of 93.1, marking the fifth straight month below the 48-year average of 98. Owners expecting better business conditions over the next six months declined four points to a net negative 54%, the lowest level recorded in the survey's 48-year history. Expectations for better business conditions have deteriorated every month since January.
Twenty-eight percent of owners reported inflation was their most important business problem, a decrease of four points from April. The share of owners raising prices increased two points to 72%, matching the number reached in March, and the highest reading on record.
Amid a tight labor market, 51% of owners reported job openings they could not fill in May. Ninety-two percent of those hiring or trying to hire reported few or no qualified applicants for the positions they were trying to fill. Twelve percent of owners cited labor costs as their top business problem, while 23% said that labor quality was their top business problem.
"Small businesses are the first to feel an economic contraction, so their concerns should be listened to closely," stated Caleb Silver, Editor in Chief of Investopedia.