Optimism at U.S. small businesses fell slightly last month as owners became cautious about the U.S. economy, according to a survey released on Tuesday.
The monthly index of Small Business Optimism, edged down 0.7 point to 98.2 in February, the National Federation of Independent Business said in its report.
Owners saw steady job creation in February, but plans to create news jobs faded slightly. While profit trends improved, owners found spikes in labor compensation adding to a mixed picture, NFIB said.
One-fourth of the owners surveyed reported jobs remained unfilled, down a point from January, signaling the unemployment rate is likely to hold steady for the first half of the year, the survey showed.
Twelve percent of the owners polled said the availability of qualified labor was their top problem, down 2 points from January, a sign of tightness in the labor market.
Nearly one-fourth of the owners surveyed plan to create new jobs, up a point from January, but 5% plan job cuts, the report showed.
The group expects profits to come under pressure in coming months as labor costs rise and the ability to pass on higher selling prices become more difficult, the report said.
Thirty percent of the companies polled reported higher labor compensation and only 13% passed those costs on to their customers, the report said.
The poll is based on 725 respondents to the February survey of a random sample of NFIB's 600,000 member firms questioned through Feb. 28.