Small Business Optimism Improves Amid Challenges
Sharon Miller, who serves as President and Co-Head of Business Banking at Bank of America, recently discussed small businesses’ outlook for 2026 on “Claman Countdown.” Despite the economic uncertainties, a new report from the National Federation of Independent Business (NFIB) reveals that sales saw an uptick in November, aided by a persistent push for more suitable workers in the labor market.
In November, the NFIB Small Business Optimism Index climbed 0.8 points to reach 99, which aligns with its 52-year average of 98. Out of the ten components that make up the index, six experienced an uptick, three fell, and one remained stable.
The primary driver for the index’s rise was the increase in small and medium-sized businesses anticipating further growth in real sales. Specifically, the percentage of owners expecting higher sales rose by 9 points from October, reaching a net of 15%.
While optimism is on the rise, small business owners still express frustration over the shortage of qualified workers. Bull Dunkelberg, NFIB’s chief economist, noted, “Even so, there’s a larger number of companies planning to create new jobs soon.”
Tariff Uncertainty Affects Employment
This uncertainty surrounding tariffs has led to job losses in small businesses during November.
The NFIB report indicated increased small business optimism in November, even as labor market and inflation challenges persist.
A considerable 21% of small business owners highlighted the quality of labor as their top concern in November, which marks a decrease of 6 points from October.
The NFIB noted that business owners are increasingly frustrated by the lack of skilled workers to take on open positions. Job openings are still above historical norms, and compensation has increased throughout the year, yet hiring has not kept pace.
Private Sector Experiences Job Losses
In an unexpected twist, the private sector lost 32,000 jobs in November, according to ADP data.
Small and medium enterprises are noticing rising average selling prices, a trend anticipated to continue in the future.
Concerns about labor quality now surpass inflation as 15% of small business owners identify it as their second most pressing concern, reflecting a 3-point increase since October.
Notably, about 64% of small business owners report that supply chain disruptions are affecting their operations. This figure rose by 4 points since last month, with those experiencing significant supply chain issues increasing by 3 points to 7%.
Federal Reserve Expected to Cut Rates Again
The Federal Reserve is anticipated to reduce rates for the third consecutive time this week amidst ongoing labor concerns.
Confidence among small and medium-sized enterprises about improvements in business conditions has been on a downward trend since January.
The NFIB survey found that the net percentage of owners raising their average selling prices increased by 13 points from October, now standing at 34%. This represents the highest level since March 2023 and marks the largest monthly increase noted in the survey’s history.
Looking ahead, the pressure of inflation seems poised to continue. A net of 30% of small businesses plan to raise their prices in the next three months, staying consistent with October’s numbers.
When it comes to expectations for a better business environment, small and medium enterprises have seen a 32-point decline since January. Only 13% of business owners felt that November was a good time for expansion, unchanged from October, which the NFIB categorized as a relatively weak indicator compared to other metrics during periods of economic growth.
