by Ethan Faverino | Jun 13, 2026 | Economy, Must Read, News
By Ethan Faverino |
Small business job openings declined sharply in May while concerns over rising labor costs reached the highest level in the survey’s history, according to the National Federation of Independent Business (NFIB) May Jobs Report released Friday.
The NFIB Small Business Employment Index remained essentially flat in May, standing at 100.3 after 100.4 in April. This marks the third consecutive monthly decline. The index now sits below the 2025 average of 101.2, though it remains slightly above the long-term historical average of 100.
In May, 29% of small business owners reported job openings they could not fill, a 5-point drop from April and the lowest reading since May 2020. Openings for skilled workers fell 2 points to 27%, while openings for unskilled positions dropped 4 points to 9%.
“Concerns about rising labor costs increased significantly to the highest reading in the survey’s history,” stated Chief Economist Bill Dunkelberg. “Small business owners are facing mounting pressure to retain workers, and many firms are navigating costly new state mandates. While current conditions restrict Main Street’s already-thin profit margins, compensation measures remain steady for now.”
Arizona-specific concerns added to the unease. “Arizona small businesses are growing increasingly uneasy as labor costs climb and uncertainty around state tax policy remains unresolved,” NFIB State Director Chad Heinrich added. “Failure to conform with the business provisions Congress made permanent at the federal level will result in a tax hike on Main Street Arizonans. Small businesses need certainty to plan, invest, and create jobs, and time is running short for lawmakers to deliver.”
Looking ahead, hiring plans weakened further. A seasonally adjusted net 9% of owners plan to create new jobs in the next three months, down 4 points from April and the lowest level since May 2020. This falls below the historical average of a net 11%.
Overall, 55% of owners reported hiring or trying to hire in May, up slightly from April. However, 46% of all owners (representing 84% of those actively hiring or trying to hire) reported few or no qualified applicants for open positions.
Labor quality, the most important business problem eased to 13%, the lowest since December 2016. In contrast, labor costs surged in importance, cited by 14% of owners as their top problem — a 5 point increase from April and the highest reading on record.
Despite softening demand for new hires, compensation pressures persisted. A net 31% of owners reported rising worker compensation in May, up 1 point from April. Plans to raise compensation in the coming three months held steady at 18%.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Ethan Faverino | Apr 18, 2026 | Economy, News
By Ethan Faverino |
Small business optimism weakened in March as a sharp drop in reported profit trends and softening expectations for business conditions weighed on the outlook, according to the latest survey from the National Federation of Independent Business (NFIB).
The NFIB Small Business Optimism Index fell 3 points to 95.8, slipping below its 52-year historical average of 98 for the first time since April 2025. At the same time, the Uncertainty Index rose 4 points to 92, significantly above its long-term average of 68.
“The 20% Small Business Deduction and other supportive small business tax provisions in the Working Families Tax Cut Act have had many positives for small business owners,” stated NFIB Chief Economist Bill Dunkelberg. “However, the dramatic spike in oil prices has spooked consumers and owners alike. Small business owners are having to absorb those higher input costs and pass them along to their customers.”
Key Declines Drive the Drop in Optimism
The decline in the Optimism Index was driven primarily by two key components: the frequency of reports of positive profit trends, which plunged 11 points to a net negative 25%—the largest contributor to the overall drop—and the net percentage of owners expecting better business conditions, which fell 7 points to a net 11%, marking the third consecutive monthly decline and the lowest reading since October 2024.
Other notable movements included:
Employment Index – Fell from 103.5 to 101.6. While still above the 2025 average (101.2) and historical average (100), the 1.9-point decline signals moderation in labor market conditions.
Capital outlays – Only 16% of owners plan capital investments in the next six months, down 2 points and the lowest level since November 2009.
Sales – A net negative 5% reported higher nominal sales in the past three months (down 6 points), ending four months of improvement. Expectations for higher real sales volumes over the next quarter eased to a net 7%.
Inventory – Plans for inventory investment turned more cautious, reaching a net negative 5%, the lowest since May 2024.
Labor Market and Compensation Trends
Hiring activity showed signs of cooling. A seasonally adjusted 32% of owners reported job openings they could not fill (down 1 point), though this remains well above the historical average of 24%. Skilled worker openings stood at 27%, while unskilled openings rose slightly to 12%.
A net 12% of owners plan to create new jobs in the coming three months, unchanged from February and near the long-term average. Compensation pressures eased modestly: a net 33% reported raising compensation; plans to raise compensation in the next three months fell 4 points to a net 18%—the lowest since July 2025. Despite the declines, both actual and planned compensation remain above historical averages.
Pricing, Supply Chains, and Business Health
Actual price increases ticked up, with a net 25% of owners raising average selling prices (up 1 point and well above the historical average). Planned price hikes, however, declined 4 points to a net 24%. Supply chain disruptions affected 62% of owners to some degree (up 3 points), with most reporting only mild or moderate impacts.
When rating the overall health of their businesses, 13% called it “excellent” (up 1 point), 51% “good” (down 4 points), 30% “fair” (up 4 points), and 4% “poor” (down 1 point).
Top Business Problems and Credit Conditions
Taxes remained the single most important problem for 19% of owners (unchanged and still ranked #1), followed by labor quality at 15% (#2), and inflation at 14% (#3).
Credit conditions stayed relatively stable but tight. The net percent expecting easier credit held at negative 5%, while the average interest rate on short-term loans edged down to 7.9%. Only 24% of owners reported borrowing regularly, a historically low level. Just 11% viewed it as a good time to expand (down 4 points and below the historical average).
“Small business owners are certainly keeping a close eye on the price of oil,” added NFIB State Director Chad Heinrich. “As those cost pressures grow and Arizona’s officeholders dawdle on tax conformity, small businesses are doing everything they can to minimize price increases for their consumers and stay competitive. It’s essential that state policymakers give our small businesses certainty and fully conform with the provisions of the Working Families Tax Cut Act.”
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Ethan Faverino | Apr 9, 2026 | Economy, News
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.
by Ethan Faverino | Nov 15, 2025 | Economy, News
By Ethan Faverino |
The NFIB Small Business Optimism Index declined 0.6 points in October to 98.2 points. Despite the small decline, it remains above its 52-year historical average of 98. In a positive sign, the Uncertainty index dropped 12 points to 88, marking the lowest level this year.
NFIB Chief Economist Bill Dunkelberg said, “Optimism among small businesses declined slightly in October as owners report lower sales and reduced profits. Additionally, many firms are still navigating a labor shortage and want to hire but are having difficulty doing so, with labor quality being the top issue for Main Street.”
Labor challenges persisted, with a seasonally adjusted 32% of owners reporting unfilled job openings, unchanged for the second straight month, and the lowest since December 2020.
Labor quality was cited by 27% of owners as their single most important problem, up 9 points from September and the highest since November 2021, when it reached 29%. It ranked 11 points above taxes, the second-largest concern. Of the 56% of owners hiring or trying to hire, 88% reported little to no qualified applicants.
Sales and profits declined, as a net negative 13% of owners reported higher nominal sales over the past three months, down 6 points. Positive profit trends fell 9 points to a net negative 25%—the largest contributor to the Index decline.
Among those with lower profits, 33% blamed weaker sales, 16% noted rising material costs, and 9% pointed to both labor costs and price changes.
Pricing pressures eased slightly, with the net percentage of owners raising average selling prices falling from 24% to 21%, though it is still above the historical monthly average of 13%.
30% of small businesses plan to raise prices in the next three months, just down 1 point. An unadjusted 31% reported higher prices, while just 12% reported lower prices.
Inventory gains dropped 3 points to a net negative of 6%. 10% reported stock increases while 15% reported reductions. Supply chain disruptions were cited as the biggest reason for inventory problems, with 60% of owners saying it affected them to some extent.
Capital investments saw 55% of owners reporting outlays in the past six months. Among them, 36% spent on new equipment, 22% on vehicles, and 14% on facility improvements or expansions. 23% plan outlays in the six months.
20% of small business owners expect better conditions, the lowest since April, but well above the historical average of 4%. Only 13% view it as a good time to expand. Business health assessments shifted, with 12% rating their business as excellent, 51% good, 33% fair, and 4% poor.
“A reduction in sales and profits has certainly taken a toll on small business owners’ optimism,” NFIB State Director Chad Heinrich said. “Despite these challenges and the ongoing labor shortage, our members are resilient, with many still trying to create good-paying jobs for Arizonans.”
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Daniel Stefanski | Aug 9, 2023 | Economy, News
By Daniel Stefanski |
There continues to be a level of optimistic caution from small businesses across the United States as owners weather the current economic environment. On Tuesday, the National Federation of Independent Business (NFIB) released its monthly Small Business Optimism Index, showing an increase of 0.9 of a point in July 2023. That index now sits at 91.9, which, according to NFIB, is the “19th consecutive month below the 49-year average of 98.”
NFIB Chief Economist Bill Dunkelberg issued the following statement in conjunction with the report, saying, “With small business owners’ views about future sales growth and business conditions dismal, owners want to hire and make money now from solid consumer spending. Inflation has eased slightly on Main Street, but difficulty hiring remains a top business concern.”
Additionally, the NFIB State Director for Arizona, Chad Heinrich, shared his own thoughts on the new data, writing, “With the state legislature finally adjourned from its regular session, small business owners can continue focusing on operating their businesses without worry of new costly mandates or higher taxes coming from our state government. We are thankful for the pro-small-business legislators willing to stand against job-killing tax increases and regulatory mandates on our small businesses in Arizona.”
The national business organization highlighted some of the findings uncovered by its newly revealed report, including that “owners expecting better business conditions over the next six months improved 10 points from June to a net negative 30%, 31 percentage points better than last June’s reading of a net negative 61% – which is the highest reading since August 2021 but historically very negative;” that “forty-two percent of owners reported job openings that were hard to fill, unchanged from June, but remaining historically very high;” that “the net percent of owners raising average selling prices decreased four points to a net 25% seasonally adjusted, still a very inflationary level but trending down – which is the lowest reading since January 2021;” and that “the net percent of owners who expect real sales to be higher improved two points from June to a net negative 12%, a very pessimistic perspective.”
This NFIB Small Business Optimism Index has only climbed above 100 two times since President Joe Biden walked into the White House in January 2021. During the Trump administration, the Index sat over 100 for most months during the four years of his presidency – with declines during 2020 when COVID-19 decimated the health and structure of businesses around the nation. Earlier this month, President Biden touted his economic record, tweeting, “13.4 million jobs have been added to our economy on my watch. More than any other president in a full 4-year term, and heartening that our economic agenda is creating opportunity for working for families.”
The president also boasted of his policies giving a much-needed boost to the American economy, writing, “We have the lowest rate of inflation among the G7, down two thirds from its peak. That’s Bidenomics: growing the economy by creating jobs, lowering costs for hardworking families, and making smart investments in America.”
Twitter added a note from readers on this tweet from Biden, providing context to the information shared by the president. The note read: “According to a report released on July 4, 2023, Japan had the lowest inflation rate among the G7 countries in May of that year. The year-on-year inflation for the G7 as a whole fell to 4.6%, with Japan’s rate specifically registering below 3.5%.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
