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.
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May 13, 2026: Producer Price Index PPI Surges 1.4 Percent in April, Fed Behind the Curve?
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“The data show they drive nearly half of GDP, almost half of private‑sector employment, and most net job creation.”
BILELLO: “.. Consumer Prices in the US rose 4.5% per year over the last 5 years and over 24% in total.
2% inflation is a myth.
They won’t do it, but the Fed should be hiking rates at the FOMC meeting next week.”
The better thing to do would be to remove money from the money supply and find creative ways of banning trading on commodities. That alone would bring down inflation. There is so much money in the commodity complex that its driving up prices. Prior to deregulation of derivatives, prices on all commodities were much lower bc they actually reflected true demand and supply.
The Trump administration is on course to borrow at least 2 trillion dollars in fiscal 2026. Bringing his 5-year “he signed it into law” total to 10.5 trillion dollars. There is no economic growth. How many created entirely by the national debt billionaires are there?
Worth repeating:
I can take any wino off the street and make that wino look like a financial wizard, as long as that wino can continue to borrow and refinance large sums.
The wino’s off the street vote.
Inflation 4.2% in May. Futures down, as it makes rate cuts even more unlikely. Possibile the Fed may raise?
Fed cannot raise interest rates. Warsh knows he would be immediately fired if he allowed the Fed to raise interest rates.
There are LIES….but then lies are out-done by Government Stats. In their case, their BUSINESS is the ART of DECEPTION.
Economic news are like Trumps rhetoric.
Up and down also like TACO.
Mish, I thought you liked using the ADP payroll info (over the BLS data).
That last ADP report showed small businesses hiring big-time?
BLS has two very distinctly appropriate letters in it. Guess which ones?
Small businesses are the enemy of the corporate oligarchs. Killing them is part of Trumps version of “Winning”.
Tariffs just killed a small business owned by a friend of mine. He was too small to bribe his way around them.
I have seen many small business owners who voted for Trump 3 times having their business really hurt by tariffs.
Reap what you sow. No sympathy from anywhere outside the US.
Trump has driven many contractors into bankruptcy by refusing to pay them. He would simply ignore them and threaten them with lawsuits leaving them stuck with the materials and labor bills.
I have heard that Trump would claim that they benefitted from being able to say they worked for “Trump” so he owed them nothing.
It’s the same sadistic behavior as biting a teenage girls nipples till they bleed. Of course blowing up teenage girls sitting in school is another unapologetic Trump achievement…
Trump is one sick puppy!
💩
My worst nightmare would have been Donald Trump standing in my doorway with my favorite daughter.
The Small-Business Owners Managing Whole Armies of A.I. Employees
When you turn A.I. agents loose on your finances, email and customers, what could possibly go wrong?
https://archive.is/vncNg#selection-4609.0-4615.100