Small business optimism dropped in January

Further evidence that turning the calendar page did not result in the immediate experience of a happier 2021, at least not for small business owners. The NFIB small business optimism index fell below its longterm average in January.

The NFIB Small Business Optimism Index declined in January to 95.0, down 0.9 from December and three points below the 47-year average of 98. Owners expecting better business conditions over the next six months declined seven points to a net negative 23%, the lowest level since November 2013. The net percent of owners expecting better business conditions has fallen 55 points over the past four months.

Major findings:

  • The NFIB Uncertainty Index decreased 8 points to 82.
  • The percent of owners thinking it’s a good time to expand decreased 4 points to 8%.
  • Sales expectations over the next three months declined 14 points to a net negative 4%.
  • Earnings trends over the past three months declined 7 points to a net negative 14% reporting higher earnings.

These charts summarize the findings. Note the recent dip in the index: