• Sat. Feb 24th, 2024

Small Business Sentiment Plummets in January: NFIB Report


Feb 13, 2024
Small business sentiment plummets due to labor worries and rising costs -NFIB report shows greatest decline in 13 months

In January, U.S. small business sentiment reached its lowest point since May 2023, according to a report published on Tuesday. The National Federation of Independent Business monthly sentiment index fell to 89.9 from 91.9 in December, marking the largest decrease since December 2022. This keeps the index below its 50-year average of 98 for a 25th consecutive month.

Labor quality and inflation were the top concerns for business owners in January, with sales conditions tightening as the share of owners reporting profit growth fell to a net negative 30% from a net negative 25% in December. As a result, small business owners are making adjustments to respond to the economic challenges they are facing.

Despite these challenges, the share of owners citing inflation as their top concern dropped by 3 points to 20%. This coincides with the Federal Reserve’s rate hike campaign in December 2022 to curb inflation, though the Fed has since signaled that rate hikes are over and it should be in a position to lower rates later this year.

Looking ahead, the portion of owners expecting better business conditions in the next six months fell by two points to negative 38%. Additionally, the share of owners who expect higher real sales also decreased by twelve points in January to negative sixteen percent. These statistics paint a sobering picture of the challenges faced by small business owners and highlight their ongoing struggles as they navigate through these uncertain economic times.

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