The National
Federation of Independent Business (NFIB) reported on Tuesday that its Small
Business Optimism Index dropped by 1.6 points to 95.8 in April, following a 3.3-point
decline in the previous month. This marked the lowest reading since October
2024 (93.7) and represented the second consecutive month that the indicator was
above the 51-year average of 98.0.
Economists had anticipated
the gauge to fall to 94.5 in April.
According
to the report, the April drop in the headline gauge was due to declines in six
components, led by a measure of small business owners expecting the improvement
in the economy (-6 points), and a measure of small business owners reporting
they have job openings that they could not fill in the current period (-6
points). In the meantime, three components - a measure of small business owners
reporting positive profit trends (+7 points), a measure
of small business owners planning to increase employment in the coming months (+1
point), and a measure of small business owners viewing current inventory stocks
as “too low” (+1 point) - increased, while a measure of small business
owners judging that now is a good time to expand was unchanged.
Commenting on
the latest data, Bill Dunkelberg, NFIB Chief Economist, noted that uncertainty
continues to be a major impediment for small business owners in operating their
business in April, affecting everything from hiring plans to investment
decisions. “While owners are still trying to fill a high number of current job
openings, their outlook on business conditions is less supportive of future
business investments,” he added.