Almost Half Of All Small Businesses Are Hiring

Optimism Among Small Business Owners Is 23% Below Where It Was Just Six Months Before.

The National Federation of Independent Business (NFIB) published economic data this week that revealed what many people had seen: In December 2021, 49% of all small firms had at least one position open, significantly greater  than the 48-year historical average of 23%.

The most common reason why businesses hire are: to expand (a sign that business owners have positive feelings about the future) and to replace departing employees (a sign that the business can afford to replace employees, also positive). So you'd think that boardwalk psychics (who are also small business owners!) would be able to predict some wonderful fortune, but it's not necessarily the case.

In December, the NFIB polled small firm owners across the United States and discovered that despite a modest boost in optimism about future economic circumstances over the previous month, optimism is still 23% below where it was six months before—and 22% of respondents cited inflation as their main concern.

The concern is that costs will continue to rise. Inflation hit 7% each year on average since December, the largest increase since 1982, and little businesses have been having a hard time keeping up. Of the firms reporting lower earnings, 29% blamed rising material expenses, 22% cited lower sales, and 17% blamed labor costs.

It's imperative to keep track of how small businesses are progressing: According to the Small Business Administration, they account for 44% of the country's economic activity.

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