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The NFIB Small Business Optimism Index inched up 0.8 points to 99.0 in November, remaining slightly above the 52-year average of 98. November’s increase was due primarily to a jump in sales in the previous quarter and sales expectations going forward. Of the 10 components included in the index, six increased, three decreased and one stayed the same. Meanwhile, the Uncertainty Index increased 3 points to 91, still well above the 51-year average (68) and above the average since 2016 (80).

Labor quality was again cited as the top concern for small business owners, with 21% reporting it as the most important problem, but was down 6 points from October. Business owners experienced difficult hiring conditions, as 33% struggled to fill open jobs, up 1% from October and the first increase since June. The share of business owners reporting inflation as a top problem rose 3 points from October to 15%, with a net 34% raising prices, up 13 points from the prior month and the largest monthly jump in survey history. Meanwhile, taxes fell to third in the list of concerns, with 14% reporting it as a top problem, down 2 points from October.

A net 26% of small business owners reported raising compensation, unchanged in November after falling 5 points in October. Meanwhile, 24% of business owners plan to raise compensation in the next three months, up 5 points from October. Pressure on profitability weakened in November, with positive profit trends rising 2 points from October to a net negative 23%. Among owners reporting lower profits, 27% blamed weaker sales, 16% cited increased material costs, 12% noted labor costs and 9% mentioned usual seasonal changes. Meanwhile, 4% reported their last loan was harder to get than previous attempts, down 1 point from October, and a net 2% of owners cited paying a higher rate on their most recent loan, up 1 point from the prior month.

The outlook for general business conditions fell 5 points to 15%. Furthermore, expectations for better business conditions have fallen 32 points since the start of the year. On the other hand, 13% reported that it is a good time to expand their business, unchanged from October and a rather weak reading compared to times of economic expansion. Overall, affordability continues to be a concern for small business owners, and uncertainty remains high.