Small businesses across the U.S. are starting to anticipate brighter horizons, according to a recent report by the National Federation of Independent Business (NFIB). The organization releases an “Optimism Index” based on factors like employment plans, inventory increase, and earning trends. This June, the index rose 2.9 points—an improvement from the decline in May.
With the economy opening up, 28% of businesses have stated that they plan to create new jobs in the next three months. However, those that are currently hiring have also found it difficult to identify qualified applicants. Small businesses ranked finding quality labor as their “single most important problem,” and 56% of survey respondents said they received few or no qualified applicants for open jobs in June.
June Shows Highest Employment Numbers
Employment is slowly trending upward as 46% of small businesses reported unfilled positions in June, compared to 48% in May. A monthly jobs report from the U.S. Labor Department confirmed this improvement: June showed the highest number of workers hired within the last 10 months.
Recent unemployment data in the U.S. has been inconsistent—while the number of new claims increased slightly last week, the number of continuing claims dropped. The total number of unemployment claims is still above the 200,000-250,000 range—which is considered normal for a healthy labor market.
Optimism Index Predicting Steady Growth as Small Businesses Re-Opening
Overall, the Optimism Index seems to mirror the economy’s slow climb toward normalcy as small businesses are seeing more and more opportunities to reopen, recover, and grow. Investors can play a key role in helping small businesses move beyond the initial hurdle of cash flow to really take advantage of growth opportunities and see long-term success.
In support of small business growth, the government offers benefits like tax exemption for qualified small business stock (QSBS). Stock from qualified small businesses can be sold without triggering a federal capital gains tax, and many states also offer similar tax breaks in support of small businesses.
Get your bearings in the world of small business stock by visiting our QSBS Basics webpage.
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.