U.S. Small Business Set Out Brighter Views, Survey Says

By Joshua Kirby

U.S. small businesses are feeling progressively more cheerful as the year goes on, with confidence gradually recovering despite price rises still biting.

The National Federation of Independent Business said Tuesday that its small-business optimism index rose to 90.5 in May, marking the second straight month that businesses have expressed a brighter outlook, and the high point so far this year. The reading remains well below the long-term average of 98, but beat expectations for a slighter increase over the month, according to economists polled by The Wall Street Journal.

Inflation remains the number-one headache for small businesses, with more than a fifth pointing at it as their single most important problem. Headline rates of inflation eased in April and core prices are set to have risen at their slowest level since 2021 last month, according to forecasts ahead of the release of official figures Wednesday. But inflation hasn't eased much on Main Street, said Bill Dunkelberg, chief economist at NFIB.

"Small business owners need relief," Dunkelberg said.

Though inflation remains at the forefront of business's minds, the labor market looks to be cooling a little. Fewer than a fifth of owners plan to hike pay over the coming three months, the lowest rate in more than three years.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

June 11, 2024 06:14 ET (10:14 GMT)

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