Input Stories

The NFIB Small Business Optimism Index rose 2.2 points in October to 93.7, marking the 34th consecutive month below the 50-year average of 98. Meanwhile, the Uncertainty Index rose seven points to 110, the highest reading ever recorded. This high level of uncertainty is making small business owners hesitant to invest in capital and inventory, with 54% of owners reporting capital outlays in October and a net 9% of owners reporting inventory reductions compared to gains. However, uncertainty is expected to fall with the election over.

Although price increases have slowed in recent months, inflation is the top concern for small business owners, with 23% identifying higher input and labor costs as their primary issue. Filling job openings continues to be a top issue for small businesses. In October, 35% of small business owners reported jobs they could not fill, up 1% from September.

A net 26% of small business owners planned price hikes in October, up 1% from the month prior. A net 31% of small business owners reported raising compensation, down one point from September and the lowest reading since April 2021. Following the Federal Reserve’s September interest rate cut, a net 5% of owners reported paying a higher rate on their most recent loan, down 7 points from September and the lowest reading since January 2022. Profitability remained under pressure, mainly due to weaker sales.

The outlook for general business conditions remains negative but has improved significantly from earlier in the year. While small business owners are still facing unprecedented economic adversity, owners remain hopeful as they head toward the holiday season.