The NFIB Small Business Optimism Index is dropping


The National Federation of Independent Business (NFIB) is a non-profit organization that represents small and independent business owners. Founded in 1943, the organization advocates for policies and legislation that support the interests of small businesses and promote entrepreneurship. The organization’s “Optimism Index” is a monthly survey that measures the level of optimism among small business owners, as well as their perceptions of the economy and their own businesses. This survey covers a range of topics, such as sales, earnings, employment, inventories, capital spending, and credit conditions. It is based on a scale of 0 to 100, with a reading above 50 indicating that small business owners are optimistic about the economy, and a reading below 50 indicating that they are pessimistic.

For 49 years, the index has sat pretty at an average of 98. However, in December of 2022, the index dropped two points to 89.8 - this is now the twelfth consecutive month below that average. Inflation remains the single most important problem for small business owners with hiring challenges falling in a close second.

With the NFIB Small Business Optimism Index being considered a leading indicator of economic activity, a drop in the index is an indication of economic weakness. Small businesses are a significant contributor to economic growth, and the level of optimism among small business owners can provide insight into the overall health of the economy.

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