The National Federation of Independent Business (NFIB) Small Business Optimism Index weakened in March, falling to 90.1 and marking the fifteenth straight month the index has come in well below the 49-year average of 98. Among the key takeaways, 24% of small business owners reported that inflation remained their biggest problem, so the latest reports of cooling inflation are a positive development.
What’s the bottom line? Overall, small business owners are “cynical about future economic conditions,” per NFIB’s chief economist Bill Dunkelberg. He added, “Hiring plans fell to their lowest level since May 2020, but strong consumer spending has kept Main Street alive and supported strong labor demand.”
However, Retail Sales did fall 1% in March, after February brought a 0.2% decline from January’s stronger than expected sales. Business owners will be closely watching whether the pullback in spending continues this spring.