Golden State Today

Small business optimism in the United States experienced a slight decline in January, though it remained above its 51-year average for the third month in a row. This information was released by the National Federation of Independent Business (NFIB) through their monthly Small Business Optimism Index.

John Kabateck, state director for NFIB in California, commented on this trend: “Prior to this nice three-month stretch, the Small Business Optimism Index went 34 consecutive months below its 51-year average. What we could be witnessing is a possible rebound for all sectors of the economy. A rebound that could get some serious traction with the right state and federal policies. A possible rebound that could just as easily be undercut by the wrong ones.”

The NFIB’s Small Business Optimism Index is widely regarded as an essential measure of America's small business economy. It serves as an indicator used by various stakeholders including the Federal Reserve and Congressional leaders to assess Main Street enterprises' health.

Bill Dunkelberg, NFIB Chief Economist, provided insights into current conditions: “Overall, small business owners remain optimistic regarding future business conditions, but uncertainty is on the rise. Hiring challenges continue to frustrate Main Street owners as they struggle to find qualified workers to fill their many open positions. Meanwhile, fewer plan capital investments as they prepare for the months ahead.”

Key findings from January's index include a five-point drop in net owner expectations for economic improvement compared to December, remaining at a net 47% when seasonally adjusted. The percentage of owners reporting unfilled job openings stayed steady at 35%, while those planning capital outlays decreased by seven points to 20%. Loan accessibility improved slightly with only a net 3% finding it harder than before to secure loans.

NFIB has been advocating for small businesses across America since its founding over 80 years ago and continues its efforts both federally and within individual states.