(Bloomberg) -- US small-business optimism increased to a more than two-year high in July on a more sanguine outlook about the economy and sales.
The National Federation of Independent Business optimism index rose 2.2 points to 93.7 — the fourth straight monthly advance, marking the longest streak since before the pandemic. While still downbeat about future business conditions, the share of firms expecting the economy to worsen is the smallest since November 2020.
This factor was almost entirely responsible for the advance in the sentiment gauge, while four other components of the 10 that make up the headline measure also improved in July. In addition to economic expectations, the net share of businesses anticipating higher sales in coming months rose to the highest level this year.
The pickup in the optimism gauge, while still below pre-pandemic levels, was accompanied by better news on the inflation front. The report showed the share of firms planning price increases dropped to a net 24%, the lowest since April 2023. A smaller share indicated they already raised selling prices last month.
Firms continue to battle headwinds including elevated prices, interest rates and labor costs. A quarter of business owners said inflation was their single-biggest problem in July, up four percentage points from the prior month.
The share of firms reporting job openings they couldn’t fill rose slightly but still hovered near the smallest since early 2021. Hiring plans held steady.
The NFIB also produces an uncertainty index, which adds together responses in which businesses “don’t know” or are “uncertain” of the answers on six questions. That gauge reached the highest level since 2020.
Results of the NFIB survey were based on 1,309 respondents through July 29.
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