WASHINGTON (Reuters) -U.S. small-business confidence fell for a fourth straight month in April, with the share of owners reporting job openings declining to the lowest level in more than four years, potentially hinting at a significant labor market slowdown.
The National Federation of Independent Business said on Tuesday its Small Business Optimism Index dropped 1.6 points to 95.8 last month, making the second consecutive month of a reading below the 51-year average of 98.
The index peaked at 105.10 in December amid euphoria following President Donald Trump’s electoral victory.
It has been declining since then as Trump’s chaotic trade policy cast a pall over the economy. The NFIB’s Uncertainty Index eased 4 points to 92 last month.
The United States and China took a major step towards de-escalating their trade war on Monday, with Washington agreeing to slash duties on Chinese goods to 30% for the next 90 days. Tariffs on U.S. goods imported into China would decline to 10% from 125%. A 10% blanket duty on almost all imports remains in place as do sector tariffs.
Last month, 34% of small business owners reported job openings they could not fill, down 6 points from March. That was the smallest share since January 2021 during the COVID-19 pandemic. Twenty-nine percent of owners had openings for skilled workers, down 4 points. Unfilled jobs were the lowest in finance and agriculture industries.
But workers remained scarce in construction, while front-loading of goods likely boosted demand for labor in the wholesale industry. Goods imports surged to a record high in March. That is unlikely to last as the share of owners planning inventory investment over the coming months fell to an 11-month low. Small businesses have been the main drivers of job gains.
The labor market has slowed amid a hesitancy by employers to add more workers. Layoffs, however, remain low and are anchoring the labor market. Economists expect job growth will slow considerably this year as tariffs take a toll on the economy.
The share of small business owners expecting better business conditions fell 6 points to 15%.
“This component, along with unfilled job openings, contributed the greatest to the Optimism Index’s decline,” said NFIB Chief Economist Bill Dunkelberg.
Inflation is no longer the single most important problem for small businesses amid easing wage pressures. It has been overtaken by taxes. Despite declining job openings, businesses remained concerned about the quality of labor.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
Comments