US Small Business Hiring Plans Drop to Lowest Since May 2020

June 4, 2026 - 22:28

The percentage of American small businesses planning to add new workers or struggling to fill open positions dropped in May to its lowest level since May 2020, according to data from the National Federation of Independent Business. The NFIB's monthly jobs report showed that a net 12% of small business owners said they plan to create new jobs over the next three months, down from 14% in April and the weakest reading since the early pandemic months.

The decline signals a cooling in the labor market among the nation's smallest employers, which typically account for a significant share of job creation. Only 20% of owners reported job openings they could not fill, also a notable drop from recent months. The NFIB survey, which has tracked small business sentiment for decades, suggests that rising costs, ongoing inflation pressures, and uncertainty about the economic outlook are making owners more cautious about expanding their payrolls.

While the labor market overall remains relatively tight by historical standards, the pullback in small business hiring plans could be an early indicator of broader softening. The NFIB noted that the share of owners raising compensation also edged lower, with a net 27% reporting they had increased wages over the past three months, down three points from April. Fewer owners now say they expect to raise compensation further in the coming months.