Business

American optimism with small businesses rises despite labor shortages, inflation worries

People find their way in a local street in Chinatown in the Manhattan district of New York City, New York, USA, on March 25, 2021. REUTERS / Eduardo Munoz / File Photo

People find their way in a local street in Chinatown in the Manhattan district of New York City, New York, USA, on March 25, 2021. REUTERS / Eduardo Munoz / File Photo

Confidence among small businesses in the U.S. improved slightly in June after falling in May, despite owners worrying about labor shortages and inflation, according to a study published Tuesday.

The National Federation of Independent Business (NFIB) Optimism Index rose 2.9 points to a reading of 102.5 in June. Seven of the 10 index components were improved and three decreased.

“Small business optimism rises as the economy opens up, but a record number of employers continue to report that there are few or no qualified applicants for open positions,” NFIB Chief Economist Bill Dunkelberg said in a statement.

“Owners also have a hard time keeping their inventories up with strong sales and supply chain problems.”

Net 28% of companies plan to create new jobs in the next three months, an increase from May and a record high level.

Earlier this month, the trade group said in its monthly job reports that 46% of small business owners reported unfilled job openings in June on a seasonally adjusted basis, down from 48% in May.

The quality of labor ranked as companies’ “only major problem”, with 26% of respondents choosing it among 10 questions, near the survey’s highest level of 27%. About 56% of respondents said they had few or no qualified applicants for open jobs in June, down from 57% in May.

The NFIB survey comes as the number of Americans filing new unemployment benefit claims rose slightly last week, while continued claims fell.

In addition, it appears that employment has strengthened in June, when U.S. companies hired most workers in 10 months.

Companies in the NFIB survey also marked inflation as a concern, and a record 44 percent plan to raise prices over the next three months.

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