Things are looking … up? A 19-point jump in the August reading of the NFIB Small Business Optimism Index reflects an improved outlook and signals a decrease in concerns about inflation, though the problem persists.

The NFIB index hit 91.8 in August, up from 89.9 in July, but still short of the 48-year average reading of 98. While some first-half declines in sentiment are being reversed, overall confidence is still down, and inflation remains the biggest worry for 29% of small business owners. That’s a drop from 37% in July but indicates a high degree of uncertainty among owners. “The small business economy is still recovering from the pandemic while inflation continues to be a serious problem for owners across the nation,” said NFIB chief economist Bill Dunkelberg.

Other findings from the survey:

• The number of small business owners who expect better business conditions over the next six months improved 10 percentage points from July. That’s still bleak but reflects the highest level since February 2022.
• The net percent of owners who raised average selling prices decreased 3 percentage points to a net 53% seasonally adjusted, which reflects a continuing inflationary climate.
• In the NFIB monthly jobs report, 49% of owners reported unfilled job openings, the same figure as July. While this remains historically high, owners’ plans to fill their workforce vacancies are growing: A seasonally adjusted net 21% of small business owners plan to create new jobs in the next three months.

“Owners are managing the rising costs of utilities, fuel, labor, supplies, materials, rent and inventory to protect their earnings,” Dunkelberg said. “The worker shortage is impacting small business productivity as owners raise compensation to attract better workers.”

Read the detailed summary at NFIB.