NFIB's December jobs report reveals a decline in the number of small business owners planning to increase compensation in the coming months. The report indicates that 35% of small business owners reported unfilled job openings in December, a slight decrease from November. Additionally, a net 29% reported raising compensation, marking the lowest level since March 2021.

Bill Dunkelberg, NFIB Chief Economist, commented on the findings: “Finding qualified workers remained a major headwind for stronger job growth on Main Street in December. In the meantime, compensation increases have softened among small businesses but remained solid as the year came to an end.”

The report also highlights that 24% of small business owners plan to raise compensation over the next three months, down from November's peak this year. Labor costs remain a significant concern for business owners at 11%, slightly below the highest recorded level of 13% in December 2021.

Nineteen percent of owners identified labor quality as their primary operational challenge, unchanged from November. Furthermore, a net 19% of owners intend to create new jobs within three months, reflecting a slight increase.

In December, 55% of small business owners were hiring or attempting to hire, consistent with November's figures. Among these employers, 49% encountered few or no qualified applicants for their open positions; specifically, 28% reported few qualified candidates and 21% reported none.

Openings for skilled workers decreased by one point to 29%, while openings for unskilled labor remained steady at 13%. The transportation, construction, and manufacturing sectors saw the highest job vacancies. However, construction sector openings dropped significantly by both monthly and yearly comparisons.

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