US small business confidence improved in April, and the number of owners planning price increases was the least in a year. However, ongoing labor shortages continued to create cost pressures for owners, according to a new survey released on Tuesday.
US Small Business Optimism Index
According to Reuters, the National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index rose 1.2 points to 89.7, slightly recovering from March's 0.9 points to 88.5, which is the lowest level since December 2012.
The latest figure marked the first increase in 2024 but the 28th consecutive month below the 50-year average of 98. The NFIB report also showed a rise in the percentage of owners expecting higher real sales, climbing six points from March to a net negative 12%.
Additionally, the number of owners planning to create new jobs in the next three months increased by one point to 12%. The survey also revealed a decline in the percentage of owners planning price hikes, dropping seven points to 26%, the lowest since April last year.
However, 40% of owners reported job openings they could not fill, an increase of three points from March, indicating ongoing challenges in the labor market. Regarding hiring, 56% of owners reported efforts to hire in April, with 91% experiencing difficulties finding qualified applicants.
Inflation Remains the Top Issue
Despite the improved confidence, inflation is still a top concern for many business owners, with 22% identifying it as their most pressing issue.
"Cost pressures remain the top issue for small business owners, including historically high levels of owners raising compensation to keep and attract employees," NFIB Chief Economist Bill Dunkelberg said in a statement.
"Overall, small business owners remain historically very pessimistic as they continue to navigate these challenges. Owners are dealing with a rising level of uncertainty but will continue to do what they do best - serve their customers," he added.
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