U.S. small business sentiment rises modestly in December - NFIB

A speed limit sign is seen beside a city sign for Economy, Indiana, U.S., November 10, 2020. Picture taken November 10, 2020. REUTERS/Timothy Aeppel/File Photo

WASHINGTON, Jan 11 (Reuters) - U.S. small business confidence increased modestly in December amid growing concerns about inflation and worker shortages, a survey showed on Tuesday.

The National Federation of Independent Business said its Small Business Optimism Index rose 0.5 point to 98.9 last month. Twenty-two percent of owners said inflation was the single most important problem for operations, up from 18% in November.

The economy is experiencing a period of high inflation as the COVID-19 pandemic snarls supply chains.

But there are tentative signs that supply bottlenecks are starting to ease, with an Institute for Supply Management survey last week showing manufacturers reporting improved supplier deliveries in December. Economists and Federal Reserve officials expect inflation will start subsiding this year.

Even as inflation concerns mounted last month, the NFIB survey showed the share of owners raising average selling prices decreased two points to 57%. Price hikes were the most frequent in wholesale, construction and retail industries.

The proportion of businesses planing to raise prices fell five points to 49%.

According to the NFIB survey, 49% of owners reported job openings that could not be filled, up a point from November. It said 48% reported raising compensation. That was the highest in 48 years and was up four points from November. About a third planned to raise compensation in the next three months.

The government reported last month that there were 10.6 million job openings at the end of November.

Reporting By Lucia Mutikani; Editing by Andrea Ricci

Our Standards: The Thomson Reuters Trust Principles.