NFIB Research Center Monthly Economic Report – May 2023
Small Business Trends
The Optimism Index decreased 1.1 points in April to 89.0. This is the sixteenth consecutive month below the 49-year average of 98. The last time the Index was at or above the average was December 2021. Of the 10 index components, 4 increased, 6 decreased.
Twenty-three percent of owners reported that inflation was their single most important problem in operating their business, down 1 point from last month and 14 points lower than last July’s highest reading since 1979 Q4. Evidence of an easing in inflation pressure.
Owners expecting better business conditions over the next six months declined 2 points from March to a net negative 49 percent, although 12 percentage points better than last June’s reading of net negative 61 percent.
Forty-five percent of owners reported job openings that were hard to fill, up 2 points from March, remaining historically very high. With owners’ views about future sales growth and business conditions dismal, owners want to hire and make money from still solid consumer spending.
The net percent of owners raising average selling prices decreased 4 points to a net 33 percent seasonally adjusted, still a very inflationary level but trending down.
The net percent of owners who expect real sales to be higher deteriorated 4 points from March to a net negative 19 percent, a bearish outlook but far better than the June and July numbers last year.
Unemployment
The U.S. economy added 253,000 jobs in March, after an increase of 236,000 jobs last month. The prior two months’ estimates were revised down by 78,000 and 71,000 jobs. The unemployment rate changed little at 3.4%. Significant job gains continued in professional and business services,
health care, leisure and hospitality, and social assistance.
The most recent Job Openings and Labor Turnover Survey (JOLTS) produced by the Department of Labor found there were 9.6 million available jobs, 300,000 less than last month.
Job openings decreased in transportation, warehousing, and utilities. Job openings increased in
educational services. The ratio of unemployed workers to job openings continues to be under one, indicating that there are more open positions than people seeking work, a very tight labor market.
NFIB’s April SBET survey found 45% of owners with “hard to fill” job openings, up 2 points from March, and historically very high. Owners hope to fill some of those openings with solid hiring plans.
Retail Sales
The Monthly Retail Trade Report measures consumer spending at retail stores and food services. Retail sales increased by 0.4% in March after a decrease of 0.7% last month (revised), according to advance estimates of U.S. retail and food services. This was 1.6% above April 2022. April’s increase was the first increase since January. Retail trade sales were up 0.4% from March 2023 and food services and drinking places were up 9.4% from last year. Nonstore retailers were up 8% from last year.
Data for May will be released June 15, 2023. These figures are not adjusted for inflation (e.g., gas dollar volumes rise as gas prices rise, actual gallons purchased increased by smaller percentages).