NFIB Jobs Report: Small Business Employment Holds Steady as Labor Market Tightens

According to the National Federation of Independent Business (NFIB) October jobs report, 35% of small business owners reported unfilled job openings, up one point from September’s reading and marking the highest level since January 2021. The report highlights persistent labor market challenges for small businesses, with 20% of owners identifying labor quality as their top operational concern—a three-point increase from last month.

“On Main Street, the job market remains challenging,” NFIB Chief Economist Bill Dunkelberg says. “Although the labor market appears to be softening overall, small business owners reported little success filling their plentiful vacancies in October.”

Key Findings from the October Jobs Report:

• Hiring Efforts: In October, 53% of small business owners reported hiring or attempting to hire, a decrease of six points from September. Among these, 46% (87% of those hiring or trying to hire) reported few or no qualified applicants for their positions. Specifically, 25% found few qualified candidates, while 21% reported finding none at all.
• Open Positions by Skill Level: The percentage of businesses with openings for skilled workers rose by one point to 31%, while openings for unskilled labor remained steady at 14%.
• Sector-Specific Openings: Job vacancies were highest in the construction, transportation, and wholesale sectors, with construction showing a four-point decrease from last month to 49% of businesses unable to fill open positions. Openings were lowest in the agriculture and finance sectors.
• Job Creation Plans: A seasonally adjusted net 15% of small business owners plan to create new jobs over the next three months, consistent with September’s findings.

Labor Costs and Compensation Trends:

Labor costs, cited by 8% of small business owners as their most pressing issue, declined by one point from September and remain five points below the December 2021 peak of 13%.

The report also found that a net 31% of small business owners reported raising compensation in October, a one-point drop from September and the lowest reading since April 2021. Looking ahead, a net 23% plan to increase compensation over the next three months, holding steady from last month.