Latest news with #UncertaintyIndex
Fibre2Fashion
15-05-2025
- Business
- Fibre2Fashion
US Small Business Optimism slips in April amid rising volatility: NFIB
US' Small Business Optimism Index fell by 1.6 points to 95.8 in April, marking the second straight month it remained below the 51-year average of 98, according to National Federation of Independent Business (NFIB). The Uncertainty Index dropped by four points to 92 but stayed significantly above the historical average of 68. The seasonally adjusted data showed that 34 per cent of business owners had unfilled job openings in April, a 6-point decline from March and the lowest since January 2021. The net per cent of owners expecting better business conditions fell 6 points from March to a net 15 per cent (seasonally adjusted), the lowest since last October. This component, along with unfilled job openings, contributed most to the Optimism Index's decline, NFIB said in a press release. In April, the NFIB Small Business Optimism Index dropped to 95.8 in US, below the 51-year average. Key concerns included labour quality and weak sales expectations. Job openings and capital investment plans declined, while inflation concerns eased. Despite ongoing uncertainty, more owners rated their business health as good or excellent. Profit trend improved slightly, signalling cautious optimism. The net per cent of owners expecting higher real sales volumes fell 4 points from March to a net negative 1 per cent (seasonally adjusted). This is the fourth consecutive month real sales expectations declined. A net negative 4 per cent (seasonally adjusted) of owners plan inventory investment in the coming months, down 3 points from March and the lowest reading in 11 months. Eighteen per cent (seasonally adjusted) plan capital outlays in the next 6 months, down 3 points from March. Nineteen per cent of small business owners identified labour quality as the single most important issue in April, unchanged from March, making it the top concern for the third month in a row. Meanwhile, 14 per cent cited inflation as their main challenge, down 2 points from March and the lowest level since September 2021, placing it third among key concerns. Thirteen per cent of small business owners rated the overall health of their business as excellent, marking a 2-point rise from the previous month, while 56 per cent described it as good, up 3 points. The share of owners reporting business health as fair declined by 4 points to 27 per cent, and those rating it as poor remained unchanged at 4 per cent. A seasonally adjusted 34 per cent of small business owners reported having job openings they could not fill in April, a 6-point decline from March. Among the 56 per cent of owners who were hiring or attempting to hire, 85 per cent said they received few or no qualified applicants. Looking ahead, a seasonally adjusted net 13 per cent of owners plan to create new jobs within the next three months, up one point from March, as per NFIB monthly jobs report. Labour costs reported as the single most important problem for business owners fell 3 points in April to 8 per cent. Seasonally adjusted, a net 33 per cent reported raising compensation, down 5 points from March. A seasonally adjusted net 17 per cent plan to raise compensation in the next three months, down 2 points from March. The frequency of reports of positive profit trends was a net negative 21 per cent (seasonally adjusted), 7 points better than in March and the highest reading since March 2023. Among owners reporting lower profits, 38 per cent blamed weaker sales, 14 per cent cited usual seasonal change, 11 per cent blamed the rise in the cost of materials, 9 per cent cited the price change of their product or service, and 8 per cent cited labour costs. '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,' said Bill Dunkelberg, chief economist at NFIB. '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.' Fibre2Fashion News Desk (SG)
Yahoo
13-05-2025
- Business
- Yahoo
US small business sentiment declines further in April
WASHINGTON (Reuters) -U.S. small-business confidence fell for a fourth straight month in April, with the share of owners reporting job openings declining to the lowest level in more than four years, potentially hinting at a significant labor market slowdown. The National Federation of Independent Business said on Tuesday its Small Business Optimism Index dropped 1.6 points to 95.8 last month, making the second consecutive month of a reading below the 51-year average of 98. The index peaked at 105.10 in December amid euphoria following President Donald Trump's electoral victory. It has been declining since then as Trump's chaotic trade policy cast a pall over the economy. The NFIB's Uncertainty Index eased 4 points to 92 last month. The United States and China took a major step towards de-escalating their trade war on Monday, with Washington agreeing to slash duties on Chinese goods to 30% for the next 90 days. Tariffs on U.S. goods imported into China would decline to 10% from 125%. A 10% blanket duty on almost all imports remains in place as do sector tariffs. Last month, 34% of small business owners reported job openings they could not fill, down 6 points from March. That was the smallest share since January 2021 during the COVID-19 pandemic. Twenty-nine percent of owners had openings for skilled workers, down 4 points. Unfilled jobs were the lowest in finance and agriculture industries. But workers remained scarce in construction, while front-loading of goods likely boosted demand for labor in the wholesale industry. Goods imports surged to a record high in March. That is unlikely to last as the share of owners planning inventory investment over the coming months fell to an 11-month low. Small businesses have been the main drivers of job gains. The labor market has slowed amid a hesitancy by employers to add more workers. Layoffs, however, remain low and are anchoring the labor market. Economists expect job growth will slow considerably this year as tariffs take a toll on the economy. The share of small business owners expecting better business conditions fell 6 points to 15%. "This component, along with unfilled job openings, contributed the greatest to the Optimism Index's decline," said NFIB Chief Economist Bill Dunkelberg. Inflation is no longer the single most important problem for small businesses amid easing wage pressures. It has been overtaken by taxes. Despite declining job openings, businesses remained concerned about the quality of labor. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-05-2025
- Business
- Yahoo
US small business sentiment declines further in April
WASHINGTON (Reuters) -U.S. small-business confidence fell for a fourth straight month in April, with the share of owners reporting job openings declining to the lowest level in more than four years, potentially hinting at a significant labor market slowdown. The National Federation of Independent Business said on Tuesday its Small Business Optimism Index dropped 1.6 points to 95.8 last month, making the second consecutive month of a reading below the 51-year average of 98. The index peaked at 105.10 in December amid euphoria following President Donald Trump's electoral victory. It has been declining since then as Trump's chaotic trade policy cast a pall over the economy. The NFIB's Uncertainty Index eased 4 points to 92 last month. The United States and China took a major step towards de-escalating their trade war on Monday, with Washington agreeing to slash duties on Chinese goods to 30% for the next 90 days. Tariffs on U.S. goods imported into China would decline to 10% from 125%. A 10% blanket duty on almost all imports remains in place as do sector tariffs. Last month, 34% of small business owners reported job openings they could not fill, down 6 points from March. That was the smallest share since January 2021 during the COVID-19 pandemic. Twenty-nine percent of owners had openings for skilled workers, down 4 points. Unfilled jobs were the lowest in finance and agriculture industries. But workers remained scarce in construction, while front-loading of goods likely boosted demand for labor in the wholesale industry. Goods imports surged to a record high in March. That is unlikely to last as the share of owners planning inventory investment over the coming months fell to an 11-month low. Small businesses have been the main drivers of job gains. The labor market has slowed amid a hesitancy by employers to add more workers. Layoffs, however, remain low and are anchoring the labor market. Economists expect job growth will slow considerably this year as tariffs take a toll on the economy. The share of small business owners expecting better business conditions fell 6 points to 15%. "This component, along with unfilled job openings, contributed the greatest to the Optimism Index's decline," said NFIB Chief Economist Bill Dunkelberg. Inflation is no longer the single most important problem for small businesses amid easing wage pressures. It has been overtaken by taxes. Despite declining job openings, businesses remained concerned about the quality of labor.
Miami Herald
12-05-2025
- Business
- Miami Herald
Report: Inflation and labor shortages are stressing small business owners right now
Inflation, reduced consumer spending and labor shortages top small business owners' list of worries, according to a nationwide NEXT survey of 500 business owners that also asked what they're doing to address those concerns. The goal of the survey was to understand how business owners think about the economy and the threats to their business, and what's changed since NEXT's last pulse check in 2023. The results show how small business owners think about and respond to risk. The survey indicates that inflation remains the top stressor for small business owners in 2025-though the concern has eased slightly since NEXT's last survey in 2023. More than six in ten, 62%, say inflation is their biggest source of stress. While that number is down from 68% in 2023, it still leads their list of worries ahead of reduced consumer spending (43%), a potential recession (38%) and supply chain issues (up to 35% from 31% in 2023). This data reflects larger trends outside NEXT's report. The Small Business Optimism Index fell 2.1 points in February 2025 for the fourth consecutive month, and the Uncertainty Index rose 4 points, according to a recent survey from the National Federation of Independent Business (NFIB). Whether or not a recession is looming, small business sentiment reveals real concerns with current economic conditions. While a labor shortage is low on the list of stressors for small business owners, it's one of the fastest-growing sources of stress-more than doubling from 14% in 2023 to 30% in 2025. Finding and retaining talent is a real and valid concern for people owning and operating a business. There are 1.7 million fewer Americans in the workforce than there were pre-pandemic (February 2020), according to a March 2025 report from the U.S. Chamber of Commerce. Every month, businesses in the U.S. create hundreds of thousands of jobs, but many of them are unfilled. Some industries feel this labor crisis more than others. For example, the retail sector and financial services show the highest levels of unfilled jobs. 61% of startups fear the rising costs of goods and services There were 7.2% more business applications in March over January 2025, according to the U.S. Census Bureau. Based on this data point, they predict a 10.2% increase in the start of new businesses. But despite growth in the interest of entrepreneurship, small businesses owners in NEXT's survey revealed several roadblocks that could impact someone's decision to start a business. Economic conditions for would-be entrepreneurs top the list of barriers to launch a new business. Survey respondents identified the rising costs of goods and services as the biggest challenge (61%), increased competition (40%), changes in taxes or tax incentives (37%), workforce shortages (34%), funding access (34%), changes in interest rates (31%) and climate change (20%) as potentially impacting the growth of small businesses in the U.S. Not surprisingly, there's considerable overlap between the stressors for existing small business owners and what they predict will discourage new entrepreneurs from launching a business this year. Small business owners are no strangers to uncertainty. But the challenges they face in 2025 are uniquely layered: the threat of inflation, uneven consumer demand and growing labor pressure. But small business owners aren't waiting for the economy to stabilize-they're adjusting, adapting and taking action. 2025 is unfolding as a year that's all about making smart decisions in a tough market. This story was produced by NEXT and reviewed and distributed by Stacker. © Stacker Media, LLC.
Forbes
21-04-2025
- Business
- Forbes
Uncertainty Rules The World On Main Street
This year will be one ruled by uncertainty. Global and domestic actions are generating insecurities in abundance, both political and economic. President Trump's administration is rearranging chairs on the deck at a record pace. Is there an 'iceberg' looming ahead or will we sail through to a restructured economy safely? Since 1986, NFIB's Uncertainty Index (based on the sum of 'don't know' and 'uncertain' responses to six forward-looking questions) has averaged 68. But, since 2016 it has averaged 80 and reached a 51-year record high of 110 in October 2024. After reaching a near-record high of 105.1 in December 2024, the Small Business Optimism Index has declined, falling to 97.4 in March (the 51-year average is 98). Since last October, the Index component 'Expected Business Conditions' has moved from a net -5% to a net 52% in December. As of March 2025, it is back down to 21% expecting better conditions, 'expectational whiplash'! Inflation remains a sticky problem. Reaching 9% (CPI) a few years ago, it has fallen to below 3% (but not yet reaching the Fed's target of 2%). From 2020 to 2024, the level of prices (CPI) increased 20%, delivering a huge reduction in purchasing power to consumers who now wish to see prices fall, not just rise more slowly. The net percent of owners raising selling prices was 26% in March, much lower than the 66% reached in March 2022 but still historically high. From 1986 to 2020, the average was 8%! It is no surprise that many small business owners still pick inflation as their most important problem, close behind labor quality and taxes. They want input prices to fall (including labor), but this usually takes a slowdown or recession, requiring reductions in selling prices as well. Credit availability, and not credit costs, is the most important financial variable to small firms. During the Fed's fight against inflation in the early 1980s, owners reported paying interest rates averaging 19%, compared to 8.9% in March 2025. As was the case in 1982, the Fed's policy rate will drive the cost of loans to small firms. In 2024, the Fed started cutting its rate but stopped when inflation stubbornly refused to hit 2%. Now, tariffs threaten progress in inflation reduction, and there is speculation that if inflation picks up due to tariffs, the Fed may have to raise rates, not cut them. Then again, if tariffs bring on a recession and the usual accompanying price cuts, the Fed can continue to reduce rates to 3% or so to fight recession and boost construction. A policy rate of around 3% is the longer run target for FOMC. Over the past 51 years, taxes (federal, state, and local) were most frequently cited as the top business problem by a wide margin. Based on surveys of a random sample of owners, taxes received the most votes as the single most important business problem (50%), followed by inflation with 12%, labor quality at 11%, and weak sales and insurance costs each with 10%. Government regulations (compliance costs) received 6% of the vote, often considered a tax, the firm must use its resources to do what the regulator wants. Financing and interest rates received a few votes (1%) but was clearly not a top concern. On Main Street, the turbulence caused by the new economic policies will begin to show up via changes in the prices of inputs and inventories produced abroad. To the extent new policies are discouraging spending, sales will soften. Firms will respond by changing prices and employment levels. Nothing new here, small business owners only have a few options on how to move forward in these types of conditions.
