Small business optimism, a measure of the outlook of small business owners about the future of their business and the economy, fell in March to its lowest level since December 2012, according to a report from the National Federation of Independent Business (NFIB).

The small business optimism index fell in March to 88.5 points, far below the 50-year average of 98, according to a survey done by the NFIB. The index for small business owners’ expectations of higher sales volume declined 8 points, the most out of any category, totaling -18% as owners remain largely pessimistic about their businesses’ sales expectations. (RELATED: ‘Enormously Naive’: JPMorgan CEO Slams Biden’s Natural Gas Pause, Issues Warning About Economy)

Expectations for future earnings among small businesses improved slightly, rising by 3 points, but remain wholly pessimistic at -36%, according to the NFIB. The only other category that saw improvement in the month was earning trends, which increased 2 points to -29%.

Around 25% of small business owners surveyed reported that inflation was the single most important problem when operating their business, which is up 2 percentage points since February, according to the NFIB. A net of 28% of owners raised their average selling price in March to adjust to rising expenses, up 7 points from the previous month.

The US’s NFIB Small Business Optimism Index fell for a third consecutive month to 88.5 in March 2024, the lowest since December 2012 and well below forecasts of 90.2.

I am not surprised by this trend. We are experiencing a bifurcated America, with big capitalization companies in… pic.twitter.com/dAMpyjL7Nu

— The Quant Guy (@Andrea_Texas_82) April 9, 2024

Prices have risen 18.5% since President Joe Biden first took office in January 2021, most recently rising 3.2% year-over-year as of February, as businesses struggle to deal with rising expenses. In response to elevated inflation, the Federal Reserve has placed its federal funds rate in a range of 5.25% and 5.50%, the highest level in 23 years, increasing the cost of credit for both businesses and consumers.

Labor quality was the most important issue for 18% of small business owners in March, up 2 points from the previous month, as employers in the transportation, construction and services sectors struggled to fill positions, according to the NFIB. The U.S. added 303,000 nonfarm payroll jobs in March, up from the 275,000 jobs that were announced in February.

The White House did not immediately respond to a request to comment from the Daily Caller News Foundation.

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