AP Business Writer May Anderson
NEW YORK (AP) – Small business owners have felt more uncertain about the future of January as they continue to address labor challenges and prolonged inflation.
According to a monthly poll of Small Business Owners of the National Federation of Independent Business Federations, the uncertainty index rose 14 points in January, the third highest recorded reading after a two-month decline. The NFIB said SME owners feel they are not confident about investing in their business due to uncertain business conditions over the coming months.
The response reflects overall consumer confidence that plunged in February, the biggest monthly decline in over four years, with inflation appearing to be stuck under President Donald Trump The trade war is considered inevitable.
The NFIB poll showed optimism fell 2.3 points to 102.8 in January, but remained high. Optimism surged after the presidential election, with the index still surpassing its 51-year average of 98 for the third consecutive month.
“Overall, small business owners remain optimistic about future business conditions, but uncertainty is increasing,” said Bill Dunkilberg, chief economist at NFIB. “The employment challenge continues to be frustrated as Main Street owners struggle to find qualified workers to fill many open positions, while in the coming months Prepare and invest less capital.”
18% of owners reported that inflation is the most important issue in running a business, falling 2 percentage points from December, matching the quality of work as the biggest issue.
The workforce remains the best headache. Seasonally adjusted 35% of all SME owners reported job openings that could not be filled between December and January. Of the 52% of owners employed or sought to hire in January, 90% reported little or no eligible applicants for the position they were trying to fill.
Also, fewer small businesses are planning to invest capital to expand their business. Planned capital expenditures of 20% over the next six months have fallen 7 percentage points from December.
Original issue: February 25th, 2025, 11:22am EST
