Small business owner confidence remained elevated last month, according to a new report from the National Federation of Independent Business. Specifically, the headline optimism index ended June at 107.2, down from 107.8 in May but better than expected and the 6th-highest reading in the 45-year history of this survey. Under the hood, half of the ten main components that make up the sentiment gauge strengthened last month and half deteriorated. Most of the weakness in June was concentrated in owners’ outlooks for sales, business expansion, and the overall economy. As for job creation, employment growth slowed last month to the lowest level since December but this was likely due to the continued talent shortage in America.
Indeed, reported hiring plans remained elevated in June and the number of job openings climbed to a new record. At the same time, 55 percent of surveyed owners complained about there being “few or no” qualified applicants for the positions they are trying to fill, an all-time high. Unsurprisingly, quality of labor was once again the top-cited problem facing small businesses in America, something which only a more significant pickup in wage growth will be able to fix any time soon. Overall, though, this was another encouraging report on a very important sector of the U.S. economy, and the NFIB researchers added that “Record numbers [of owners] see the current period as a good time to expand operations and are trying to hire more workers. Capital spending is at levels not seen in a decade. Regulatory burdens are being reduced. Small business owners are focusing on what really matters and moving the economy forward. Economic growth will be solid through the end of the year on Main Street.”
Sources: NFIBPost author: Charles Couch