Small business owners are more optimistic than they’ve been throughout 2024 but they remain less optimistic than they have been historically.
The NFIB Small Business Optimism Index rose 0.8 point to 90.5 in May, a figure that is the highest level of the year but is still below the historical average of 98, the NFIB said in a Tuesday (June 11) press release.
The Index has been below that historical average for 29 consecutive months, according to the release.
“Small business owners need relief as inflation has not eased much on Main Street,” Bill Dunkelberg, chief economist at NFIB, said in the release.
Inflation remains the top concern in this sector, with 22% of small business owners saying that it is the single most important problem they face in operating their business, per the release.
Labor quality was the second most cited concern, with 20% of owners saying it is their top business problem.
Ten percent of small business owners said labor costs is their biggest problem — a figure that is 3 points below the highest reading of 13% seen in December 2021.
Financing is a growing concern, according to the release. Six percent of small business owners said financing was their top business problem, a figure that was up 2 points from April and the highest it’s been since June 2010.
The NFIB also found that the share of small business owners saying their current inventory stocks are “too low” fell to its lowest point since October 1981, the share of owners planning to raise compensation in the next three months dropped to its lowest reading since March 2021, and the share planning to hire rose to its highest level of 2024, per the release.
PYMNTS Intelligence has found that Main Street small and medium-sized businesses (SMBs) are demonstrating real resiliency despite news about rising inflation and stalled interest rates.
Most mom-and-pop shops are seeing an upward trajectory in revenues, continuing a three-year upward trend dating back to April 2021, according to “Small Main Street Businesses: Growing Fast Ahead of the Economy.”
More than half of Main Street SMBs reported increasing revenues in January, and the sector’s revenue growth exceeded nominal GDP growth in 2023, per the report.
Job cuts in government, technology and retail led the way as U.S. employers announced the largest number of cuts in one month since May 2020.
Among the 275,240 job cuts announced in March, 216,215 were in government, 15,055 were in technology and 11,709 were in retail, Challenger, Gray & Christmas said in a report released Thursday (April 3).
“Job cut announcements were dominated last month by Department of Government Efficiency (DOGE) plans to eliminate positions in the federal government,” Andrew Challenger, senior vice president and workplace expert for Challenger, Gray & Christmas, said in the report. “It would have otherwise been a fairly quiet month for layoffs.”
The total number of job cuts made in March was more than three times the 90,309 cuts announced in March 2024, according to the report.
By sector, compared to March 2024, government job cuts were almost six times higher, technology cuts were about 6% higher and retail cuts were nearly twice as high, per the report.
All the government job cuts made in March occurred in the federal government, the report said.
The top reason employers gave for cutting jobs in March was “DOGE impact,” which was cited for 216,670 of the month’s cuts, according to the report.
Other common reasons included store, unit or department closing, to which 17,666 job cuts were attributed, and market/economic conditions, which accounted for 11,594 cuts, per the report.
Challenger, Gray & Christmas also said in the report that employers are planning to hire fewer workers than they were a year ago. Companies’ hiring plans dropped by about 37%, from 21,102 in March 2024 to 13,198 in March 2025, according to the report.
The specter of uncertain job security may accelerate a spending pullback that is already in motion, PYMNTS reported Wednesday (April 2). Consumer confidence that was already shaken may have been further impacted by the Bureau of Labor Statistics’ latest snapshot of the labor market released Tuesday (April 1), which found that the labor market slowed in February, with a decline in job openings over the past year.
The Conference Board reported March 25 that consumer confidence slipped for the fourth straight month in March, due in part to a plunge in consumers’ short-term outlook for income, business and labor market conditions.
