The NFIB Small Business Optimism Index rose 0.2 points in May to 93.8. Four of the 10 Index components posted a gain, four declined and two were unchanged. The biggest gain was in expected business conditions, which rose five points but still nine points below last year's reading.

Owners are still reporting that they cannot find qualified workers and cite it as their fourth “single most important business problem.” Earning trends among small businesses fell another point and sits at a dismal reading of negative 20. The political climate continues to be the second most frequently cited reason for why owners think the current period is a bad time to expand.

Fifty-six percent reported hiring or trying to hire (up 3 points), but 48 percent reported few or no qualified applicants for the positions they were trying to fill. Hiring activity increased substantially, but apparently the “failure rate” also rose as more owners found it hard to identify qualified applicants.

Fifty-eight percent reported capital outlays, down 2 points. The percent of owners planning capital outlays in the next 3 to 6 months fell 2 points to 23 percent. Seasonally adjusted, the net percent expecting better business conditions increased 5 percentage points to a net negative 13 percent.