Decline in Small Business Optimism

The National Federation of Independent Business (NFIB) reported a noticeable decrease in small business optimism across the United States in March. The optimism index fell by 3.3 points to 97.4, dipping below the 51-year average of 98 and missing market expectations.

Uncertainty and Expectations

Alongside the drop in optimism, the Uncertainty Index also saw a significant decrease, falling eight points from February's second-highest recorded reading to 96. A sharp decline was observed in the net percentage of owners anticipating better conditions, which plummeted 16 points to 21%, marking the steepest fall since December 2020.

Rising Concerns and Adjustments

Concerns over taxes rose to 18%, reaching their highest since late 2021, closely followed by labor quality concerns at 19%. Sales expectations took a hit, dropping 11 points to a mere 3%, while the net percentage planning price hikes slightly decreased to 26%. Despite this, 30% of businesses still intend to raise prices in March, setting a one-year high.