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Small Business Snapshot

Yesterday, the National Federation of Independent Business (NFIB) released its monthly report on small business sentiment as of January 2022.  

Here’s our Executive Summary:

Supply Chain

  • 90% of small business owners report supply chain disruptions on their business, with 36% reporting a significant impact
  • 18% reported increases in inventory while 15% reported stock reductions
  • A net 3% of owners plan inventory investment in the coming months, down from 8% in from December, reflecting successful inventory building efforts


  • 22% of owners state that inflation remains their #1 business problem, the highest since 1981
  • 61% of owners are raising average selling prices, the highest since 1974

Labor Market

  • 11% of owners state that labor costs as their #1 business problem
  • 47% of owners reported job openings that could not be filled
  • 50% reported raising compensation, the highest since 1974


  • “Small business owners remain pessimistic about economic conditions over the next 6 months”
  • Consumer sentiment notably more optimistic than small business owner sentiment (see chart, courtesy of Advisor Perspectives)

Here’s our take: 

  • We believe supply chain disruptions are a significant driver of inflation, but that the threat they pose small business financial health will dissipate over 2022
  • As such, we expect inflationary pressures to ease over time, which will help labor market imbalances to ease over time
  • Volatility will be a meaningful factor in 2022 as the economy assesses the impact of higher interest rates against an expanding economy that continues to recover from the shutdown of 2022