The Small Business Optimism Index from the National Federation of Independent Business (NFIB) fell more than expected in October, as the measure remains near its pandemic low. Not only are small businesses continuing to struggle with inflationary pressures and a shortage of qualified workers, but demand has started to falter as well. With consumers running out of ways to maintain their high spending levels, the change in earnings reported by small businesses reached one of the worst readings in its history outside of the 2008 Financial Crisis. And with the Federal Reserve continuing to tighten monetary policy, the NFIB expects that the worst is still to come: “Success for the Fed [in fighting inflation] is bad news for small businesses, sales will fall, costs will be sticky, so profits will take a hit. Rough times ahead.”
Eli Petropoulos, CFA – Sr. Market Analyst
