US small-business optimism falls to lowest since October 2024

AN INDEX of US small business optimism fell in May to the lowest level since October 2024, erasing almost all of the gains seen since President Donald Trump was elected for a second term.

The National Federation of Independent Business optimism index fell 0.6 point to 95.3, according to data out on Tuesday (Jun 9). The measure had climbed to a six-year high in December 2024 following the presidential election.

Rising prices and economic uncertainty due to the Iran war continue to hang over companies.

Seventy per cent of small business owners reported that supply chain disruptions affected their business to some extent, up 6 points from April. The share of owners citing inflation as their most important business problem climbed for a third straight month.

The net share of owners raising selling prices climbed to 36 per cent, the highest in more than three years. And more price hikes are in the pipeline for consumers. A similar share plan to increase prices in the next three months.

“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,” NFIB chief economist Bill Dunkelberg said in a statement.

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Despite excitement about artificial intelligence, only 16 per cent of small business owners plan to make capital outlays in the next three to six months — down 1 point from April and matching the lowest level since 2009, according to the NFIB.

The share of small businesses saying they’re planning new hires or are having trouble filling jobs, meanwhile, both fell to six-year lows. BLOOMBERG