Small-business optimism slips as expansion appetite weakens

Small-business optimism edged below its long-run average in September, NFIB reported Tuesday, as fewer surveyed owners considered it a good time to expand.

The index fell 0.8 points to 97.9, compared with its 52-year average of 98.0. Uncertainty rose one point to 90, above its historical average of 68.

Only 7% of owners, seasonally adjusted, said it was a good time to expand, down five percentage points from August. Labor quality or availability was the top problem for 26%, while 20% named inflation.

Borrowing also became more expensive: the reported average rate on short-maturity loans increased 0.7 percentage points to 8.2%.

The combination matters for hiring and investment decisions, but a sentiment survey does not establish that actual output or employment has fallen. The headline index remained close to its long-run norm despite weaker expansion appetite.

The survey was conducted in September among respondents randomly selected from NFIB’s membership. It describes that group’s experience, rather than a census of all U.S. businesses.