(June 11): Optimism among U.S. small businesses rose in May to its highest level this year as businesses became less pessimistic about the economic outlook.
The National Federation of Independent Business's business sentiment index rose 0.8 points to 90.5, slightly above the median forecast. Bloomberg It is below the long-term average of 98 in a survey of economists.
Five of the 10 components of the business confidence index increased in May, mainly due to a seven-point increase in the percentage of managers who expect the economy to recover. Companies' plans to expand employment also improved.
This is the second time this year that optimism among small businesses has improved, but the index remains well below pre-pandemic levels as companies struggle with high prices, interest rates, labor costs and lingering employment issues.
The NFIB survey found that the share of businesses planning to raise prices rose 2 percentage points to 28%, after plummeting to a one-year low last month. The share of executives saying inflation is their biggest concern remained steady at 22%, while 6% said financing was their biggest business issue, the highest level in nearly 14 years.
In May, the percentage of businesses reporting they were unable to fill hiring slots rose 2 percentage points to 42 percent, and 15 percent of businesses said they planned to create new jobs in the next three months, up 3 percentage points, though these labor indicators have generally been declining this year.