By Ed Frankl


Confidence among U.S. small businesses improved slightly in December, albeit remaining subdued as inflation concerns rose again.

The National Federation of Independent Business said Tuesday that its small-business optimism index rose to 91.9 in December from 90.6 in November, better than expectations for a slight rise to 90.8 according to economists polled by The Wall Street Journal ahead of the release.

It marks the 24th straight month, or two-straight years, when the index was below the 50-year average of 98, NFIB said.

Despite the mild improvement, small-business owners remain pessimistic about economic prospects this year, according to NFIB Chief Economist Bill Dunkelberg.

"Inflation and labor quality have consistently been a tough complication for small business owners, and they are not convinced that it will get better in 2024," he added.

A net of 23% of owners reported that inflation was their single most important problem in operating their business, up one point from November and overtaking labor quality as the top problem.

It comes despite U.S. consumers' expectations of inflation falling to the lowest level in nearly three years, according to the Federal Reserve Bank of New York. One-year inflation expectations fell to 3% in December, from 3.4% in November's survey, it said Monday.

Meanwhile, the index of small business owners expecting better business conditions over the next six months improved six points in December, albeit to a still-net negative 36%, NFIB said.

But finding staff continued to be an issue, with 40% of owners reporting job openings they couldn't fill, according to NFIB's jobs report.

Almost a third of owners--a net of 29%--plan to raise compensation in the next three months, ticking down one point from November, NFIB added.


Write to Ed Frankl at edward.frankl@wsj.com


(END) Dow Jones Newswires

01-09-24 0614ET