SACRAMENTO REGION, CA (MPG) - Small business optimism across the nation fell a bit in January but for the third consecutive month, came in higher than its 51-year average, according to the release Feb. 11 of the monthly Small Business Optimism Index by the National Federation of Independent Business (NFIB).

“Prior to this nice three-month stretch, the Small Business Optimism Index went 34 consecutive months below its 51-year average,” said John Kabateck, state director for National Federation of Independent Business in California. “What we could be witnessing is a possible rebound for all sectors of the economy. A rebound that could get some serious traction with the right state and federal policies. A possible rebound that could just as easily be undercut by the wrong ones.”

The National Federation of Independent Business’s legislative agenda for California can be read at nfib.com/news-article/nfib-announces-legislative-agenda-for-california. For National Federation of Independent Business’s congressional agenda, visit nfib.com/news-article/nfib-to-congress-advance-the-small-business-growth-agenda.

The National Federation of Independent Business’s monthly Small Business Optimism Index is the gold standard measurement of America’s small business economy. Used by the Federal Reserve, Congressional leaders, administration officials and state legislatures throughout the nation, it’s regarded as the bellwether on the health and welfare of the Main Street enterprises that employ half of all workers, generate more net new jobs than large corporations, and gave most of us the first start in our working life.

The Optimism Index (aka Small Business Economic Trends report) is a national snapshot of the National Federation of Independent Business member, small-business owners not broken down by state. The typical National Federation of Independent Business member employs between one and nine people and reports gross sales of about $500,000 a year.  

“Overall, small business owners remain optimistic regarding future business conditions but uncertainty is on the rise. Hiring challenges continue to frustrate Main Street owners as they struggle to find qualified workers to fill their many open positions. Meanwhile, fewer plan capital investments as they prepare for the months ahead,” said National Federation of Independent Business chief economist Bill Dunkelberg.

Highlights from the Latest Small Business Optimism Index

The net percent of owners expecting the economy to improve fell five points from December to a net 47% (seasonally adjusted).

Thirty-five percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, unchanged from December.

Twenty percent (seasonally adjusted) plan capital outlays in the next six months, down seven points from December.

A net 3% of owners reported that their last loan was harder to get than in previous attempts (down one point). The last time it was this low was June 2022.

A net 0% (seasonally adjusted) of owners plan inventory investment in the coming months, down six points from December’s highest reading since December 2021.