Tight Labor Market A Headwind For Business Sentiment

Although the November NFIB Small Business Optimism Index remains at a high level of 104.8, today’s report is the third consecutive decline in the optimism index. The index high of 108.8 was reached in August of this year.

A constraint on growth and optimism seems to be related to the tight labor market. The category cited most frequently as the single most important problem facing business was the difficulty in finding qualified workers. The report notes,

“Sixty percent reported hiring or trying to hire (unchanged), but 53% (87% of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill (unchanged). Twenty-five percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (up 2 points), matching the record high reached in August.”

In short, small business optimism remains at a high level and is a positive factor as 2019 approaches. Finding qualified workers seems to be a headwind facing many firms though.

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