By Ethan Faverino |

The National Federation of Independent Business (NFIB) March Jobs Report, released earlier this week, shows the Small Business Employment Index declined 1.9 points to 101.6. While the index pulled back from February, it remains above the 2025 average of 101.2 and the long-term historical average of 100.

In March, a seasonally adjusted 32% of small business owners reported having job openings they could not fill, down just 1 point from the prior month but still well above the historical average of 24%. Of those, 27% had openings for skilled workers (down 1 point), and 12% had openings for unskilled labor (up 2 points).

“While small businesses are not hiring extensively, they continue to face difficulties related to labor cost and quality,” stated Chief Economist Bill Dunkelberg. “Despite the current stagnant employment growth, economic conditions could change rapidly.”

NFIB State Director Chad Heinrich added, “The numbers tell a clear story — small businesses want to hire, but qualified applicants are hard to find. Add the uncertainty around tax conformity, and owners simply can’t plan with confidence. Inaction at the Capitol has a real cost.”

A seasonally adjusted net 12% of owners reported plans to create new jobs over the next three months, unchanged from February and near the historical average of net 11%. Overall, 52% of owners said they were hiring or trying to hire in March, down 2 points from the previous month.

Among those attempting to hire, 45% reported few or no qualified applicants for the open positions, down 1 point from February. Specifically, 22% reported few qualified applicants (down 3 points) and 23% reported none (up 2 points).

Labor quality remained a top concern, with 15% of small business owners citing it as their single most important problem—unchanged from February and above the historical average of 12%. This marks the first time since December 2016 that labor quality has consistently registered at or above 15%. Meanwhile, 10% of owners identified labor costs as their top problem, up 1 point from February.

On the compensation front, a seasonally adjusted net 33% of owners reported raising worker pay in March, down 1 point from February. Looking ahead, a net 18% plan to increase compensation over the next three months, down 4 points from the prior month and the lowest reading since July 2025. Despite the recent softening, both actual and planned compensation levels remain above their historical averages.

“Employment growth has stagnated, as hiring plans continue to slide toward the historical average,” the report noted. Job openings have reached their lowest levels since the recovery from the COVID-19 recession.

Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.