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.
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.
The U.S. added 178,000 jobs in March, with gains driven by the private sector, while federal employment declined and labor force participation edged slightly lower, according to the Joint Economic Committee.
The report shows job growth rebounded following a weaker February. Private employers added 186,000 jobs, while government employment declined by 8,000 positions.
In a statement posted to X, the JEC Republicans announced the findings, “Beating Expectations!”
178K Jobs Added in March, Beating Expectations! The unemployment rate ticked down slightly from 4.4% to 4.3% while the labor force participation rate dropped again by 0.1pp from 62% to 61.9%. https://t.co/JDMVLi50QA
— Joint Economic Committee Republicans (@JECRepublicans) April 3, 2026
The unemployment rate decreased slightly from 4.4 percent in February to 4.3 percent in March. The labor force participation rate declined by 0.1 percentage points to 61.9 percent.
The broader U-6 measure of unemployment, which includes underemployed and marginally attached workers, increased from 7.9 percent to 8.0 percent.
Revisions to prior months showed weaker job performance than initially reported in February. Job losses for that month were revised downward by 41,000, from a decline of 92,000 to a decline of 133,000 jobs. January’s figures were revised upward by 34,000, bringing total job gains for that month to 160,000.
CNN Senior Reporter Matt Egan told audiences Friday, “The job market bounced back in a big way in March. And that is good news. Really, blowing away expectations.”
President Trump nearly TRIPLED job expectations in March
CNN: "I mean the expectation was what? 60,000 jobs, and it's 178,000…WOW!"
Wage growth continued on a year-over-year basis. From March 2025 to March 2026, average nominal weekly earnings for all employees on private nonfarm payrolls increased by 3.52 percent, with hourly earnings rising by the same percentage.
For production and nonsupervisory employees, average weekly earnings increased by 3.69 percent, while hourly earnings rose by 3.38 percent over the same period.
Sector-level data showed gains concentrated in specific industries. From February to March, private education and health services added 91,000 jobs, while leisure and hospitality added 44,000.
Losses were recorded in federal government employment, which declined by 18,000 jobs, and in financial activities, which fell by 15,000.
On a year-over-year basis, private education and health services added 663,000 jobs, and leisure and hospitality added 176,000. Federal government employment declined by 330,000 over the same period, while trade, transportation, and utilities decreased by 154,000 jobs.
Job openings declined during the most recent reporting period. From January to February 2026, total nonfarm job openings decreased by 358,000 to 6.88 million. The job openings rate declined by 0.2 percentage points to 4.2 percent.
Sector data for job openings showed increases in other services, which added 77,000 openings, and professional and business services, which added 64,000. Declines were led by leisure and hospitality, down 213,000 openings, and private education and health services, down 78,000.
In a statement, White House spokesman Kush Desai said, “The March jobs report blew out expectations with strong construction job growth and a surge in manufacturing job creation as trillions of dollars in investments begin to materialize. America remains on a solid economic trajectory thanks to President Trump’s proven agenda of tax cuts, deregulation, tariffs, and energy dominance. Americans can rest assured that after the short-term disruptions of Operation Epic Fury are behind us, America’s economic resurgence is set to only accelerate.”
January’s jobs report smashed expectations and signals a turning point in the labor market where job creation catches up with broader economic conditions. The report shows 130,000 jobs created, the unemployment rate falling to 4.3%, and labor force participation rising.
Economic growth last quarter was above 4% and is projected to be 4% again this quarter. The Dow Jones recently reached 50,000, as I predicted last fall. And gas prices and inflation are low.
Now workers are starting to feel the benefit in terms of associated job creation and wage growth. The jobs report shows workers’ real wages continuing to significantly rise, a stark contrast to their declines during the Biden administration.
An added bonus: Parasitical federal government jobs continue to decline, falling 34,000 last month and more than 10% since Donald Trump took office. Government jobs too often padded previous employment reports when the relevant metric should be productive private-sector job creation.
Strong labor-market, economic, and financial-market growth doesn’t happen in a vacuum. It’s the result of good public policy that empowers Main Street over big government.
Exhibit A is last year’s Republican tax cuts. These tax cuts prevented the largest middle-class tax hike in history from occurring. They empowered small businesses by restoring and making permanent 100% immediate expensing and locking in a 20% deduction on earnings. These tax cuts are game changers for job creators, incentivizing them to expand, hire, and raise wages.
Despite delivering one of the most consequential tax cuts in modern American history, however, Republicans are somehow trailing Democrats on the issue of taxes, according to new Fox News polling. Even though every single Democrat voted against them.
This isn’t just backwards. It’s political malpractice fueled by a media ecosystem that has abandoned facts in favor of Democratic talking points. Voters have been told again and again — by headlines, by cable news panels, by progressive activists masquerading as journalists — that Republicans are the party of “tax breaks for billionaires.”
In reality, these are middle-class tax cuts that actually make the tax code more progressive.
A stronger economy, rising 401(k) balances, and higher living standards will help blunt the impact of this misinformation and convert some independents. But small businesses and conservatives have a responsibility to spread the word to right this polling wrong.
Every small business with a tax-savings story needs to speak up in their communities, with their employees, and on their social media, explaining how these tax cuts have helped them survive and thrive. That’s the least they can do in return for these tax savings.
Meanwhile, conservatives need to start singing from the same page on these uniting economic issues. A strong opportunity, affordability, and standard-of-living message, combined with a focus on deporting violent criminals and sanity on culture issues, is the winning approach Republicans need to boost their polling and hold onto Congress this fall.
The first step is connecting the dots between small-business tax cuts, job creation, and affordability.
Alfredo Ortiz is a contributor to The Daily Caller News Foundation, CEO of Job Creators Network, author of “The Real Race Revolutionaries,” and co-host of the Main Street Matters podcast.
The latest job report from the National Federation of Independent Business (NFIB) shows that 34% of small business owners (seasonally adjusted) reported that despite having open positions in April, they could not find employees to fill them. Chad Heinrich, state director for NFIB in Arizona, offered some suggestions for Arizona lawmakers to address the situation and urged the passage of AZ Senate Bills 1069 and 1215.
“Arizona’s small businesses are the foundation of our economy, and our state has a chance to lead the way in empowering them,” Heinrich said in a statement. “Lawmakers have already done good work keeping taxes and regulations in check. Now, I urge them to pass Senate Bills 1069 and 1215. These two measures will lift a significant recordkeeping burden from Arizona’s smallest businesses and safeguard legal proceedings from foreign entity involvement.”
Senate Bill 1069 sponsored by AZ Senator JD Mesnard (R-LD13) would, if enacted, increase the Business Personal Property Tax exemption to $500,000 per taxpayer, relieving the tax burden on small business owners and “reduce record-keeping and compliance costs enormously,” according to the NFIB.
The bill was passed by the Senate 17-9 with four Senators not voting and passed the House Ways and Means Committee on March 5th.
The second measure, Senate Bill 1215, proposed by AZ Senate President Pro Tempore Vince Leach would require the disclosure of third-parties sponsoring predatory lawsuits against Arizona small business owners and was passed by the House Judiciary Committee on March 26th and is pending consideration by the House Rules Committee. The bill is also supported by the Arizona Chamber of Commerce & Industry, the Arizona Manufacturers Council, the Arizona Lodging & Tourism Association, and the Arizona Trucking Association.
Courtney Coolidge, executive vice president of the Arizona Chamber of Commerce & Industry said in a February statement, “Third party litigation funding has grown to an estimated $15 billion industry in the U.S. Essentially what happened is funders pour money into lawsuits in exchange for the settlement. This is a simple transparency bill to ensure transparency in our courts, protect litigants and safeguard against foreign influence. This is not just an Arizona issue; several states have passed this with bipartisan support.”
Good news! SB 1215 cleared its Senate committee today—a big step for litigation transparency in AZ. This bill reins in secretive lawsuit funding schemes that drive up costs and ensures our courts aren’t manipulated by hidden investors. A win for consumers, businesses, and… pic.twitter.com/36cfYXjDS5
Chief Economist Bill Dunkelberg explained the NFIB report’s findings saying, “Small business owners remained open to hire and grow their workforce in April. While the percent of open positions decreased a bit, Main Street firms are still struggling to find qualified applicants for their plentiful open positions.” Per the NFIB report, the percentage of unfilled job openings spiked in 2021-22 and have returned to the lowest level observed since January 2021.
Per the NFIB report, the percentage of unfilled job openings spiked in 2021-22 and have returned to the lowest level observed since January 2021 with the largest concentration of openings in construction, transportation, and manufacturing.
