By Andrew Miller
The NFIB Small Business Optimism Index results for August are here.
According to NFIB Chief Economist Bill Dunkelberg, “Uncertainty remains elevated among small business owners as they face a mixed set of challenges with weakened sales, supply chain disruptions, and inflation pressures.”
Despite lower expectations for the overall economy, he said “Main Street owners remain largely positive in the health of their own businesses.”
The single biggest problem owners named in August was the quality and availability of labor. 35% reported job openings they couldn’t fill, down one point from July but 11 points above the historical average.
Taxes and inflation followed as the next most cited problems.
Then there are actual sales, which worsened in August. More owners reported falling sales than rising sales, the weakest reading since November of last year.
Sales aren’t soft. They fell, and they fell fast enough to notice. One in ten owners now name weak sales as the single biggest problem facing their business.
Notably, sales dropped to a near year low, and owners still rated the health of their own businesses as largely good. Those two readings come from the same survey of the same business owners.
One explanation is that not every pressure moved the same direction.
The cost of labor, a separate problem from finding workers, fell to its lowest level since March 2021. Owners also reported their best outlook on credit conditions since December 2024.
Inflation, meanwhile, climbed back up the list. It’s now tied with taxes as the second most common problem reported.
All in all, business optimism held up in August. Sales did not.
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