The National Federation of Independent Business (NFIB) released its Small Business Optimism Index for June, showing a slight decline of 0.2 points to 98.6. This figure remains above the 51-year average of 98. A significant factor contributing to the decrease was an increase in reports of excess inventories. The Uncertainty Index saw a drop of five points from May, settling at 89.
“Small business optimism remained steady in June while uncertainty fell,” stated NFIB Chief Economist Bill Dunkelberg. “Taxes remain the top issue on Main Street, but many others are still concerned about labor quality and high labor costs.”
In terms of inventory management, a net negative 5% of owners felt their current inventory stocks were “too low,” reflecting a six-point drop from May’s figures. Conversely, those reporting inventories as “too high” rose from 7% in May to 12% in June.
Expectations for better business conditions dropped three points to a net positive of 22%, while expectations for higher real sales volumes also fell by three points to a net positive of 7%. The percentage planning capital outlays decreased slightly by one point to 21%.
Labor market concerns persisted with labor quality being cited as the primary issue by 16% of small business owners, unchanged since May. Inflation was noted as the main problem by only 11%, marking its lowest level since September 2021.
In job-related findings, about 36% reported unfilled job openings in June, up two points from May. Among those hiring or attempting to hire, most faced challenges finding qualified applicants.
Compensation trends indicated that a net positive of 33% had increased wages in June—a seven-point rise since May—while plans to raise compensation over the next quarter stood at a net positive of 19%.
Despite some declines, such as fewer capital outlays reported and poor sales identified more frequently as a problem (rising one point to reach 10%), there were signs of easing inflation pressures and improved profit trends.
The NFIB Research Center has been conducting these surveys regularly since the late ’70s and monthly since the mid-’80s. The data is gathered from randomly selected NFIB members and is published monthly on every second Tuesday.
