Labor Shortage Remains a Challenge for Small Businesses as Inflation Increases

National Federation of Independent Business (07/13/21)

Small business owner optimism is rising as the economy opens up, according to the National Federation of Independent Business. The NFIB optimism index increased 2.9 points in June to 102.5, the first time the index exceeded 100 since November 2020. Seven of the 10 index components improved and three declined. The uncertainty index increased four points to 83. Owners expecting better business conditions over the next six months rose 14 points to a net negative 12%. Earnings trends over the past three months improved six points to a net negative 5%.

Eight percent of owners cited labor costs as their top business concern and 26% said that labor quality was their top business problem, unchanged from May but remaining the top overall concern. A net 39% (seasonally adjusted) reported raising compensation, a record high. A net 26% plan to raise compensation in the next three months.

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