Small Business Owners Struggle with Inflation and Labor Quality Issues
Small business owners in the U.S. are grappling with inflation and labor quality issues, with a net 29% planning price hikes and a net 15% set to create new jobs over the next three months. The NFIB Small Business Optimism Index fell to 100.7 in February 2025.
Inflation remains a significant concern, ranking second only to labor quality issues. A net 32% of owners have raised average selling prices, the third-highest level in survey history. Meanwhile, 38% of small business owners reported unfilled job openings in February 2025, indicating a persistent labor shortage.
The overall optimism index has remained above its 51-year average of 98 for four consecutive months. However, the index fell by 2.1 points in February, reflecting owners' uncertainty. Only 12% of owners view the current period as favorable for expansion, marking a substantial monthly decrease.
The Uncertainty Index rose to 104, the second-highest reading ever recorded, indicating that owners are grappling with economic uncertainty. Despite plans to hire and expand, a net negative 37% of owners expect the economy to improve in the next six months, suggesting a cautious outlook among small business owners.
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