U.S. Small-Business Optimism Index Falls to 95.3 in May as Price-Hike Plans Rise, NFIB Data Show

U.S. small-business confidence declined in May, while the share of owners planning to raise prices in the next three months climbed to its highest level in nearly four years, suggesting inflation could remain elevated for some time. According to Jin10, data released Tuesday by the National Federation of Independent Business (NFIB) showed the Small Business Optimism Index fell 0.6 points to 95.3 in May, moving further below its 52-year average of 98.0. The survey’s uncertainty index rose 3 points to 91, well above its historical average of 68. NFIB said uncertainty is “the enemy of growth and investment” and is currently high, attributing much of it to the war with Iran and its impact on global oil supplies and other commodities, adding that a quicker resolution would speed a return to some form of “normal.” The survey also found that the proportion of small businesses planning to raise prices over the next three months jumped 7 percentage points to 34%, the highest since July 2022. Separately, about 36% of owners said they would raise prices, the highest since March 2023 and up 6 percentage points from April.