The National
Federation of Independent Business (NFIB) announced on Tuesday its Small
Business Optimism Index dropped by 3.3 points to 97.4 in March, following a 2.0-point
decrease in the previous month. This was the lowest reading since October 2024
(93.7).
Economists had expected
the gauge to rise to 101.3 in March.
According
to the report, the March fall in the headline gauge was due to declines in
seven components, led by a measure of small business owners expecting the
improvement in the economy (-16 points), a measure of small business owners
expecting real sales to be higher (-11 points) and a measure of small business owners
reporting positive profit trends (-4). In the meantime, two components - a
measure of small business owners reporting they have job openings that they
could not fill in the current period (+2 points) and a measure of small
business owners planning capital outlays in the next few months (+2 points) -
increased, while a measure of small business owners planning to increase inventories
in the coming months was unchanged.
Commenting on
the latest data, Bill Dunkelberg, NFIB Chief Economist, noted that the
implementation of new policy priorities had heightened the level of uncertainty
among small business owners over the past few months. “Small business owners
have scaled back expectations on sales growth as they better understand how
these rearrangements might impact them,” he added.