US small business optimism deteriorates in April, NFIB says
2023.05.09 07:11
© Reuters. FILE PHOTO: A shopping cart is seen in a supermarket in Manhattan, New York City, U.S., June 10, 2022. REUTERS/Andrew Kelly/File Photo
WASHINGTON (Reuters) – U.S. small business confidence fell in April on worries about the near-term economic outlook and persistent worker shortages, according to a survey released on Tuesday that also indicated inflation was easing.
The National Federation of Independent Business (NFIB) said its Small Business Optimism Index dropped 1.1 points to 89.0 last month. It was the 16th straight month that the index remained below the 49-year average of 98.
The share of owners expecting better business conditions over the next six months fell two points to a net negative 49%. A net negative 19% expected higher inflation-adjusted sales, down four points from March.
Higher interest rates tied to the Federal Reserve’s battle to tame inflation combined with tighter credit conditions following recent financial market stress are stoking fears of a recession this year. A fight over raising the federal government’s borrowing cap is also helping to cloud the economy.
Though the U.S. central bank has signaled it may pause its fastest monetary policy tightening campaign since the 1980s, the economy has yet to feel the full effects of the cumulative 500 basis points of hikes in the policy rate since March 2022.
Forty-five percent of owners reported job openings that they could not fill, up 2 points from March. The vacancies were concentrated in construction, despite higher mortgage rates, and transportation. Thirty-seven percent of the owners had vacancies for skilled workers, up three points from March.
The government reported last week that there were 1.6 job openings for every unemployed person in March.
The share of small business owners reporting that inflation was their single most important problem dipped one point to 23%, and was 14 points lower than last July’s peak, which was the highest reading since the fourth quarter of 1979.
About 33% of owners reported raising average selling prices, down 4 points. Government data on Wednesday is expected to show consumer prices increased strongly in April, but services costs outside housing are forecast to have risen moderately.
