The monthly Jobs Report from the National Federation of Independent Business (NFIB) shows that the Small Business Employment Index remained flat at 100.3 in May, down from 100.4 in April. This marks the third consecutive month of decline, with the current reading falling below the 2025 average of 101.2 but still slightly above the historical average of 100.0.
“With labor costs at an all-time high, it’s understandable that small business owners are putting new job creation and hiring plans on the back burner, but we can’t stay here forever. State and federal policymakers should prioritize the small business economy so it can regain its hiring and business expansion traction – and avoid imposing new costs on businesses,” said NFIB Oregon State Director Anthony Smith.
Labor costs increased significantly to the highest reading in the survey’s history, said NFIB Chief Economist Bill Dunkelberg.
Key takeaways:
- Labor costs reached the highest reading in history for business challenges, with 14% of owners reporting it as their single most important problem, up 5 points from April.
- A seasonally adjusted net 9% of owners plan to create new jobs in the next three months, a decrease of 4 points from April and the lowest level since May 2020.
- Plans to hire are now below the historical average of a net 11%.
- In May, 13% of small business owners cited labor quality as their single most important problem, down 5 points from April and the lowest level since December 2016.
