Small Business Optimism Declines in October

Inflation Continues to Weigh on SentimentSource: Economics Group of Wells Fargo Bank, N.A.Summary Persistent Price Pressures Dim Small Business Optimism

  • The National Federation of Independent Business (NFIB) Small Business Optimism Index declined 0.8 points in October to 91.3.
  • This marks the first decline in the headline index since June. However, persistent inflation, higher interest rates and economic uncertainty has kept the headline index below the 49-year average of 98 for ten straight months.
  • Inflation issues have endured, with 33% of firms identifying inflation as their single most important problem in October. Firms appear most concerned about eroding profit margins from rising input costs. The share of firms reporting positive profit trends improved one percentage point over the month but remains relatively low at -30%. Of firms reporting lower profits, 34% blamed the loss in profits on rising material costs, 22% blamed weaker sales and 12% blamed rising labor costs.