The National
Federation of Independent Business (NFIB) announced on Tuesday its Small
Business Optimism Index increased by 1.0 point to 91.5 in June, following a 0.8-point jump in the previous month. This marked the third straight increase in
the indicator, which lifted it to the
highest level since December 2023 (91.9). Nonetheless, the Small Business Optimism
Index remained below its historical average of 98 for the 30th consecutive
month.
Economists had forecast
the index to drop to 89.5 in June.
According
to the report, the June increase in the headline gauge was due to gains in 4
components, driven by a measure of small business owners viewing current
inventory stocks as “too low” (+6 points), a measure of small business owners
expecting the improvement in the economy (+5 points), a measure of small
business owners planning to increase inventories in the coming months (+4
points) and a measure of small business owners reporting positive profit trends
(+1 points). These increases, however, were partly offset by a decline in a
measure of small business owners reporting they have job openings that they could
not fill in the current period. Meanwhile, the remaining 5 components were unchanged.
Commenting on
the latest data, Bill Dunkelberg, NFIB Chief Economist, said that, Main Street remains
pessimistic about the economy for the balance of the year. “Increasing
compensation costs has led to higher prices all around,” he added. “Meanwhile,
no relief from inflation is in sight for small business owners as they prepare
for the uncertain months ahead.”