A monthly measure of optimism among small business owners decreased even as uncertainty and concerns over inflation increased.

The National Federation of Independent Business reported its Small Business Optimism Index fell 2.5 points between July and August to 91.2, more than erasing a 2.2-point gain the month before. The index has remained below its 50-year average of 98 for 32 consecutive months.

A separate index tracking uncertainty rose to 92, the highest level since October 2020.

“Historically high inflation remains the top issue for owners as sales expectations plummet and cost pressures increase,” said Bill Dunkelberg, chief economist of the NFIB. “Uncertainty among small business owners continues to rise as expectations for future business conditions worsen.”

The NFIB bases the index on the results of monthly surveys of members of the advocacy group, most of them small business owners.

For August, eight of 10 components of the index retreated while only two advanced.

The proportion of NFIB members who responded to the survey upon which the August index was based who expected the economy to improve fell six points from July. At a net negative 13 percent, more anticipated worsening conditions.

A net 24 percent of members reported plans to make capital outlays over the next six months, up a point. A net 4 percent said they consider now a good time to expand, down a point.

The share of members who expected increased sales dropped nine points. At a net negative 18 percent, more anticipated decreases.

The proportion of those who reported increased earnings fell seven points. At a net negative 37 percent, the reading stood at its lowest level since March 2010. Among those reporting lower profits, 31 percent blamed lower sales and 17 percent cited rising materials costs.

A net 13 percent reported plans to increase staffing, down two points from a month ago. A net 40 percent reported hard-to-fill job openings, up two points. Among those trying to hire in August, 90 percent reported few or no qualified applicants.

The share of members reporting plans to increase inventories fell three points to a net negative 1 percent. The proportion of those who said current inventories are too low slipped a point to a net negative 5 percent.

Asked to identify their simple most important problem, 24 percent of NFIB members cited inflation, 21 percent the quality of labor and 13 percent taxes.

A net 20 percent of members reported raising average selling selling prices. Price hikes were most frequent in the finance, retail, construction and manufacturing sectors.