The NFIB Small Business Optimism Index increased 0.2 points in May, rising to 93.8. Four of the ten components posted gains on the month, while four declined. The entire gain in the index was due to a 5 point increase in Expected Business Conditions which remains 9 points below its year ago level.
Labor market conditions improved as 56% of small business owners reported hiring or trying to hire, up from 53% in April. Forty-eight percent of employers reported few or no qualified applicants for available positions, up 2 percent from the previous month. A seasonally adjusted net 12% of employers plan to create new jobs, up 1 point from April.
The percent of owners reporting higher sales in the past three months fell 2 points to a net negative 8%. Fourteen percent of small business owners reported weak sales as their top business problem, down 3 points from the previous month.
Capital spending slipped, with 58% of businesses reporting capital outlays, down 2 points on the month. The percent of owners planning capital outlays in the next 3 to 6 months also fell 2 points to 23%.
Credit conditions deteriorated were unchanged, as 4% of owners reported that all their borrowing needs were not met. Fifty-two percent of respondents explicitly said they did not want a loan. Only 1% of owners cited financing as their top business problem, down from 2% in April.
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