WASHINGTON — U.S. small business confidence remained subdued in June after weakening in the previous month, reflecting persistent concerns about inflation, hiring and operating costs even as business owners continued to report mixed expectations for the economy.
The National Federation of Independent Business (NFIB), which publishes its monthly Small Business Optimism Index, reported that the index fell to 95.3 in May from 95.9 in April, remaining below its 52-year average of 98.0. The survey, released in June and reflecting May conditions, also showed the group's Uncertainty Index rising to 91, well above its long-term average, underscoring continued caution among small business owners.
NFIB Chief Economist Bill Dunkelberg said enthusiasm surrounding investment in artificial intelligence had not translated into broad-based confidence across Main Street businesses.
"Despite the enthusiasm around AI, the overall picture is divided," Dunkelberg said in the survey release. He added that many small businesses were struggling with significant and unpredictable increases in fuel costs that were more difficult to pass on to customers than for larger companies.
The survey found that hiring plans softened. A seasonally adjusted 29% of owners reported job openings they could not fill, the lowest level since May 2020, while a net 9% planned to create new jobs over the next three months, also the weakest reading since May 2020.
Inflation remained a significant concern. According to the NFIB, 36% of respondents reported raising average selling prices, the highest share since March 2023, while 34% planned additional price increases, the highest level since July 2022.
The findings contrasted with broader labor market data showing continued nationwide employment growth, although the survey suggested many small firms remained cautious about expanding payrolls amid elevated costs and uncertainty. Economists said the results pointed to ongoing pressure on smaller businesses despite resilience in other parts of the U.S. economy.
The NFIB's monthly survey is closely watched as an indicator of conditions facing small businesses, which account for a substantial share of private-sector employment in the United States. The organization said labor shortages, pricing pressures and uncertainty over economic conditions continued to weigh on business sentiment even as some firms reported optimism about technology-driven productivity gains.
