US small-business optimism rises for third month to 2024 high

US small-business optimism increased for a third straight month in June to the highest level this year as firms became less downbeat about the economy’s prospects.

The National Federation of Independent Business sentiment index advanced 1 point to 91.5 last month. While still pessimistic about the outlook for business conditions, the share of firms expecting the economy to worsen is the smallest in three years.

The overall sentiment index remains well below pre-pandemic levels as firms contend with high prices, interest rates and labor costs, as well as lingering hiring challenges.

Still, four of the 10 components that make up the sentiment gauge increased in June, bolstered by better inventory management.

The NFIB survey showed the share of firms raising prices rose 2 percentage points to 27%, a three-month high yet well below the peak in 2022. Price hikes were more frequent in construction and retail. At the same time, a smaller share of business owners said they plan to charge more in coming months.

The proportion of owners indicating inflation was their top concern eased one point to 21%, the smallest share since the start of the year.

The share of firms reporting job openings they couldn’t fill fell 5 points in June to 37%, matching the smallest since the start of 2021. Hiring plans held steady.