US small business sentiment up in May

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June 11 - U.S. small-business confidence and hiring plans increased in May to their highest levels of the year, but the looming U.S. presidential election also drove uncertainty to nearly a four-year high, a survey showed on Tuesday.

Despite the gain, it was the 29th straight month the index was below the 50-year average of 98. The NFIB's Uncertainty Index rose nine points to 85, the highest reading since November 2020, the month the last U.S. presidential election took place. The net percent of owners raising average selling prices was 25%, also unchanged from April. The Federal Reserve is keenly monitoring the pace of price increases as it tries to return inflation to its 2% target.

Small businesses have increasingly felt pressured in the face of persistent inflation and high borrowing costs. The U.S. central bank on Wednesday is expected to leave its benchmark overnight interest rate unchanged in the current 5.25%-5.50% range, where it has been since last July. The Fed has raised its policy rate by 525 basis points since March 2022 in order to quash elevated inflation.

 

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