Small business optimism decreased in August as uncertainty levels grew

WASHINGTON, D.C. (Sept. 10, 2024) – NFIB Chief Economist Bill Dunkelberg joined Brad Smith of Yahoo! Finance to discuss the state of the small business economy and decreasing optimism on Main Street.

Dunkelberg shared data from NFIB’s August SBET survey to show how small businesses are impacted by ongoing labor shortages and uncertainty over future business conditions:

“The biggest thing driving the Index down is really poor expectations about business conditions six months from now and expected sales over the next six months. That’s not looking good, either. So, they don’t see good things happening. Only 4% [of owners] think now is a good time to expand their business…capital spending is still historically very low. So that all adds up to a dim outlook for the small business sector."

“About 13% said they plan to increase their workforce, that’s down a little bit from [earlier levels this year]. They’ve been trying to hire for a long time, and 40% have job openings they say they are having trouble filling. And that’s been historically high all year…Ninety percent of those trying to hire say that there are few or no qualified applicants for the positions that they have available."

“The uncertainty among business owners is back at record high levels. Looking back, we are [at levels near] where we were in 2016. Uncertainty is really rising, and that’s not a good sign, of course. Uncertainty is the enemy of economic progress. People who are uncertain about the future don’t spend money and don’t hire, so that’s the issue that we have.”

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