On Tuesday, the National Federation of Independent Business released its Small Business Optimism Index, which has gradually declined compared to November. Since the beginning of 2022, it has fallen into negative territory compared to historical averages.
NFIB research director Holly Wade sums up the factors frustrating small business owners in four words: “inflation and labor shortages.”
But the problem is that inflation is falling and labor supply is improving. Still, “they haven't really seen anything to suggest that these headwinds are easing significantly,” Wade said.
But Wade said while small business owners are stressed, they are not too pessimistic about the future.
“Their sales expectations haven't deteriorated as much as they would have expected even if we were heading into a recession,” she says.
Frank Fioril of payroll processing company Paychex said the sector had overcome many challenges.
“These small businesses are very resilient and have managed to hold on and are doing very well,” he said.
Fiorille added that wages, which have been growing at the slowest pace in more than two years, are finally starting to ease a bit.
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