Small Business — 90%+ of America — Rejoices Over Labor, But Worry About Inflation

The National Federation of Independent Business (NFIB) reported Tuesday morning that inflation is the single most important issue among 30% of business owners.

What Happened: The NFIB’s small business optimism index rose 0.3% in September, making it the ninth consecutive month below the 48-year average of 98.

Labor cost and labor quality were also issues, as 22% of small business owners cited labor quality as a top issue, as reported by the NFIB.

“Even with these challenges, owners are still seeking opportunities to grow their business in the current period,” NFIB Chief Economist Bill Dunkelberg said.

As labor shortages continued to be a serious problem, 46% of small business owners reported difficulties filling their job openings, slightly down from August, but still historically high. Meanwhile, the net percent of business owners raising average selling prices slightly decreased to 51% seasonally adjusted, in order to keep up with labor costs.

See Also: Canary In The Inflation Mine? Used Car Prices Drop - Will It Show Up In CPI Figures?

Why It Matters: Small business owners planning to fill open positions remain elevated, as the number of unfilled job openings has surpassed the 48-year historical average of 23%, as 64% of owners reported hiring or trying to hire in September. Also, there is a seasonally adjusted net of 23% of owners planning to create new jobs in the next three months. Out of the hiring owners, 89% reported little to no qualified applicants for the positions they were trying to fill, according to the NFIB.

“Staffing shortages have limited small business owners’ ability to fully take advantage of current sales opportunities and they continue to adjust business operations to compensate,” said Dunkelberg, as a net 23% of owners plan to raise compensation in the next three months.

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