Small Business Hiring Plans Are the Lowest in Six Years

The NFIB Small Business Optimism Index declines again.

The National Federation of Independent Businesses NFIB reports NFIB Small Business Optimism Index Declines in May.

The NFIB Small Business Optimism Index fell 0.6 points in May to 95.3, remaining below its 52-year average of 98.0. The Uncertainty Index rose 3 points from April to 91, remaining well above its historical average of 68.

“AI investment spending has contributed to some excitement in the economy,” said NFIB Chief Economist Bill Dunkelberg. “Despite the enthusiasm around AI, the overall picture is divided. More small business owners are struggling with significant and unpredictable hikes in fuel prices, which are more challenging for small businesses to pass on to their customers compared to their larger corporate competitors.”

Key Findings

• The Employment Index remained essentially flat in May, registering 100.3 in May after measuring 100.4 in April. This is the third consecutive month in which the Index has declined. The current reading is below the 2025 average of 101.2 but slightly above the historical average of 100.0.
• In May, job openings and hiring plans fell notably to the lowest levels in six years. Twenty-nine percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, down 5 points from April and marking the lowest level since May 2020.
• A seasonally adjusted net 9% of owners plan to create new jobs in the next three months, down 4 points from April, also marking the lowest level since May 2020.
• In May, 13% of small business owners cited labor quality as their single most important problem, down 5 points from April and marking the lowest level since December 2016.
• Fourteen percent of business owners reported labor costs as their single most important problem, up 5 points from April and the highest reading in the survey’s history.
• Sixteen percent (seasonally adjusted) of small business owners plan to make capital outlays in the next six months, down 1 point from April and the lowest level since March 2009.
• Reports of supply chain disruptions picked up in May, with a shift from those reporting no disruptions to those reporting mild or moderate disruptions. Seventy percent of small business owners reported that supply chain disruptions affected their business to some extent, up 6 points from April.
• In May, reports of both actual and planned price increases rose significantly. The net percent of owners raising average selling prices rose 6 points from April to a net 36% (seasonally adjusted), marking the highest reading since March 2023. A net 34% (seasonally adjusted) plan to increase prices, up 7 points from April and marking the highest reading since July 2022.
• Eighteen percent of business owners cited inflation as their single most important business problem, up 2 points from April and marking the highest reading since December 2024. Inflation ranks as the second top problem.

Jobs Rise a Better than Expected 172,000

Forget about small businesses. Instead, please note the BLS says Jobs Rise a Better than Expected 172,000 in May, Unemployment Rate Steady

Here are the latest, and undoubtedly wrong monthly job report details.

If You Lose Your Job, How Long Will It Take to Find a New One?

• Under 5 Weeks: 30.6 Percent and Steady
• Over 14 Weeks: 41.9 Percent and Rising
• Over 26 Weeks: 27.5 Percent and Rising

The relative stability of under 5 weeks suggests 30-34 percent of the people who lose a job will quickly find another. That’s the good news.

After that, things get much worse. 41.9 percent of people who lose their job are still looking after 15 weeks.

And 27.5 percent are still looking after 26 weeks. This is why the average is so much higher than the median.

On June 5, I asked If You Lose Your Job, How Long Will It Take to Find a New One?

The median number of weeks is much lower than the average. That has good and bad implications.

Related Posts

May 12, 2026: CPI Hotter than Expected, Highest in Three Years, a Genuine Disaster

Inflation in April was another scorcher. Here are some month-over-month and year-over-year charts.

May 12, 2026: Real Hourly Earnings Decline Again, No Growth Since Trump Took Office

If it feels like you are not getting ahead, it’s because you aren’t. Six charts.

May 13, 2026: Producer Price Index PPI Surges 1.4 Percent in April, Fed Behind the Curve?

The PPI numbers exceeded the highest estimate of every economist surveyed.