U.S. small business confidence grew to a seven-month high in June, the National Federation of Independent Business (NFIB) revealed in a survey released on Tuesday.
The NFIB’s Small Business Optimism Index rose by 1.6 points in June to 91, marking its highest month-over-month rise since August 2022. Optimism regarding near-term economic prospects grew to its highest level since February 2022, with the NFIB’s general business conditions outlook index climbing 10 points to negative 40. Small businesses have exhibited a negative view of near-term prospects since December 2020.
Sales expectations among small businesses rose in June as the net percentage of business owners expecting weaker sales in the next three months fell compared to May. The overall sales outlook is now at its highest level in four months.
In June’s report, 24% of small business owners listed inflation as their biggest challenge, down from 25% in May. This is also a 13-point decline from last July’s peak.
“Inflation and labor shortages continue to be great challenges for small businesses,” NFIB Chief Economist Bill Dunkelberg acknowledged. “Owners are still raising selling prices at an inflationary level to try to pass on higher inventory, labor, and energy costs.”