In July, 33% of small business owners reported job openings they could not fill, according to the latest National Federation of Independent Business (NFIB) jobs report. This figure is down three percentage points from June and marks the lowest level since December 2020. Despite this decline, the rate remains above the historical monthly average of 25%.
The report also noted that 21% of small business owners identified labor quality as their most significant issue in July, which represents a five-point increase from June and is the largest monthly jump since August 2022.
“The challenge of finding qualified workers is easing overall but still remained significant for many small business owners in July,” said Chief Economist Bill Dunkelberg. “The easing labor market pressures are also reflected in fewer firms raising compensation.”
While data specific to individual states was not available, NFIB State Director Michael Smith commented on local conditions: “We know our members want to hire, but they are not finding the right applicants. That puts more pressure on the small business owner and their current employees as they try to meet their customers’ needs.”
The report found that 57% of small business owners were hiring or trying to hire in July, which is one point lower than in June. Among those hiring or attempting to hire, 48%—or 84% of that subgroup—reported few or no qualified applicants for open positions, a two-point decrease from June. Of all respondents, 29% cited few qualified applicants while another 19% reported none at all.
Openings for skilled workers stood at 29%, down by one point from June; unskilled worker openings fell by one point to reach 12%. Job vacancies were most prevalent in construction, wholesale, and transportation sectors while finance and agriculture saw the fewest.
Looking ahead, a seasonally adjusted net 14% of owners plan to create new jobs within three months—a figure up one point from June and above the historical average net gain of 11%.
Wage growth appears to be slowing: A seasonally adjusted net 27% reported raising compensation in July (down six points), with only a net 17% planning further increases over the next three months (down two points). The share reporting labor costs as their top problem dropped slightly to nine percent.
The full NFIB Jobs Report can be accessed online.
