The National Federation of Independent Business released their Small Business Optimism Index Monday, which remained below the 49-year average for the 17th month in a row.

Inflation and labor quality made up about half of small business owners’ biggest concern, with 25% naming inflation as their biggest problem and 24% saying the same about labor quality. 

Up to 44% of small business owners reported that “job openings were hard to fill, down one point from April and remaining historically very high.” The net percentage of owners raising their average prices decreased one point this month to a net 32%, showing a downward but still significant inflationary trend.

The NFIB Chief Economist Bill Dunkelberg said that “supply chain disruptions and labor shortages will continue to limit the ability of many small firms to meet the demand for their products and services, while less severe than last year’s experience.”

The number of small business owners expecting better conditions over the next six months declined by one point from April to May, showing overall optimism for the future economy as 50% lower than the average.

A net negative 8% of all owners reported higher nominal sales in the past three months, with the net percent of owners expecting higher real sales lowering to a net negative 21%.

The Small Business Optimism Index increased by 0.4 points in May, giving it an index of 89.4, almost nine points lower than the average of 98. Optimism has improved slightly overall since April, but small business owners are still concerned about future conditions.

The NFIB index serves as an indicator of the small business economy by collecting data on sales and the concerns and problems of owners. 

This article was originally published on and is republished with permission.

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