Thomas M. Sullivan
Vice President, Small Business Policy, U.S. Chamber of Commerce


November 14, 2023


We track the latest data on the small business outlook so that you don't have to. Every week, Tom Sullivan analyzes new data from NFIB, Intuit, WSJ/Vistage, and more, to give a weekly economic forecast for small businesses.

The Latest Forecast

Still partly sunny, with clouds on the horizon.  

What it means: Holiday spending forecasts are positive, which reinforce the sense that small businesses are “doing ok.”  Hence, the forecast for partly sunny weather on Main Street.  However, with inflation still outpacing revenue expectations, small business owners are wary of the future and continue to have an overall negative impression about the national economy.  The clouds on the horizon continue to be inflation, high interest rates, and continued worker shortages. 

Listen: Tom Sullivan and National Federation of Independent Business (NFIB)'s Holly Wade talk about their small business forecasts on a weekly podcast. Listen here.

Watch: Catch Tom Sullivan on ASBN (America's Small Business Network) every month providing the latest small business policy updates, news, and analysis. Watch here.

Coming Soon: The next MetLife & U.S. Chamber Small Business Index release is mid-December, 2023.

New Small Business Data

National Retail Federation Holiday Sales Forecast (November 2, 2023)

Summary: Sales expectations show lower growth than last year because 2022 holiday sales figures benefitted from COVID stimulus spending.

  • Overall holiday spending is expected to rise 3-4% compared to last year, reaching sales totals of $957.3 billion - $966.6 billion.
  • Online sales (included in the total, above) are expected to increase 7-9% compared to last year.
  • Last year, retailers hired 391,000 seasonal workers. This year, retailers expect to hire between 345,000 – 450,000 seasonal workers

National Retail Federation Consumer Holiday Survey (October 2023)

Summary: Consumer spending remains steady, and shoppers are looking for bargains.

  • Consumers expect to spend $875 on gifts, decorations, and food this holiday season. That is $42 more than what consumers expected to spend last year. However, the spending is $5 lower than pre-pandemic spending expectations.
  • A normal amount (43%) of holiday shoppers started shopping before November and 58% of consumers plan on shopping online this year.
  • Gift cards top consumers’ wish list (55%) followed by clothing.  Video games (28%) narrowly beat out personal care and beauty items (25%) for desired gifts.  
  • Consumers are looking to get more with less and 62% report that sales and promotions are more important this year.  36% of holiday shoppers say they are cutting back this year.

SBE Council’s Small Business AI Adoption Survey (October 31, 2023)

Summary: No surprise that small businesses are first movers when it comes to AI because AI tools free up time for founders and their teams.  

  • 75% of small businesses utilize AI in their operations, with financial management tools used the most (40%), email marketing automation ranking 2nd (32%).
  • The top 5 AI providers used by small businesses are Google (51%), Microsoft (39%), ChatGPT (37%), Adobe (30%), and QuickBooks/Intuit (29%).
  • Small businesses average $1,800 annual investment in AI-powered tools.
  • 83% of small business owners expect to invest in AI for their business operations over the next year, with 31% expecting significant investment.
  • 82% of small business owners find AI tools effective in running and growing their businesses.
  • 93% of small business owners believe that AI tools are cost-effective and improve profitability.
  • 76% of small business owners describe the use of AI tools as time-savers, freeing up an average of 13 hours a week.
  • 85% of small business owners believe government must balance regulation and innovation when it comes to trying to address risks posed by AI. 

WSJ / Vistage Small Business October CEO Confidence Index(October 26, 2023)

Summary: Plans to increase capital investment and employees remain elevated, but confidence in the economy and revenue outlook took a nosedive.

  • Small business confidence fell back down to June’s level after a 3-month elevation.
  • 49% of small business owners believe economic conditions in the U.S. have worsened compared to a year ago (6 points worse than September) and 13% believe conditions have improved (5 points worse than September). 38% believe economic conditions are the same (1 point increase).
  • 49% of small business owners believe the economy will worsen over the next 12-months (9 points worse than September) and 12% believe the economy will improve (1 point worse than September).  37% believe the economy will stay the same (7 points less than September).
  • 55% of small businesses expect revenues to increase over the next year (4 points less than September) and 13% believe revenues will decrease (no change from September).
  • 40% of small business owners expect higher profits in the coming year (4 points less than September).
  • 34% of small businesses believe they will increase capital investments in the year ahead (1 point less than September) and 48% believe they will increase staff (3 points less than September).
  • 24% of small business owners report that hiring is getting easier (9 points worse than September), with 12% reporting that hiring is harder (3 points better than September).  64% of small business owners report no change in hiring difficulty (12 points higher than September).
  • 53% of small business owners report that higher interest rates are impacting their business (1 point increase from September).
  • 60% of small business owners believe the United States is approaching a recession or is already in a recession (8 point increase from September).
  • 45%of small businesses report they have applied for the Employee Retention Tax Credit (ERTC) and 50% have not and do not plan to. 5% report they plan on applying for the ERTC.

MetLife & U.S. Chamber of Commerce Small Business Index for Q3 (September 20, 2023)

Summary:  An uptick in feelings about the local and national economy bodes well for small business owners.

  • Index score is 63.1 (up 6.1 points from Q2 of this year).  This highest level is mostly attributed to a 9-point increase in small businesses’ comfort with their current cash flow and a 6-point increase in how they rate their overall business health.
  • While more small businesses are negative about the U.S. economy (43%) than positive (33%), the intensity of negativity is lessening (14 points lower than last quarter).
  • 52% of small business owners rank inflation costs as top concern (down 2 points from last quarter and 7 consecutive quarters as top concern) and when asked about inflationary pressures, small business owners are primarily worried about wage hikes (56%).
  • 42% of small businesses plan on increasing investment over the next 12-months (unchanged from last quarter) and 40% of small businesses plan on adding staff (down 7 points from last quarter’s 5-year-high).
  • 71% of small businesses plan on increased revenues in the next 12-months (unchanged from last quarter’s record-high).
  • 70% of small businesses report that rising interest rates are limiting their ability to raise capital (down 6 points from last quarter).
  • Twice as many small businesses view employee retention as a top challenge comparted to 2-years ago (15% vs. 7% if Q3 2021).
  • 70% of small business owners are prioritizing the mental health of their employees (up from 60% in Q3 2021).
  • 89% of small business owners believe their family-like atmosphere helps retain employees and 82% believe the direct connection between owners and employees gives small businesses an advantage when it comes to hiring and keeping good employees.

EIG Analysis of Census Bureau’s Business Formation Statistics: The Startup Surge Continues: Business Applications on Track for Second-Largest Annual Total on Record by Daniel Newman(July 24, 2023)

Summary: New business applications remain elevated, especially in Southern states.  Applications to start businesses in real estate, manufacturing, and transportation & warehousing are declining.

  • High propensity (likely to hire employees) applications to start a new business increased by 7% in the first half of 2023 compared to the first half of 2022.
  • The nearly 871,000 applications in sectors likely to hire employees represent a 36% increase over the pre-pandemic mid-year baseline.
  • The strongest year-over-year growth in business applications is in healthcare, retail, arts & entertainment, and accommodation & food services.
  • 7 out of the 10 leading states in new business applications since 2019 are in the South.
  • The 16.6 million new business applications filed since March 2020 total more than the combined total during the 5 years leading up to the pandemic.
  • If the current trend of new business applications continues, this year will be the second-highest total (2021 set the record with 5.4 million business applications).

Explore More Small Business Data

The MetLife & U.S. Chamber of Commerce Small Business Index is released quarterly to deliver a comprehensive quantitative snapshot of the small business sector and explore small business owners’ perspectives on the latest economic and business trends.

About the authors

Thomas M. Sullivan

Thomas M. Sullivan

Thomas M. Sullivan is vice president of small business policy at the U.S. Chamber of Commerce. Working with chambers of commerce and the U.S. Chamber’s nationwide network, Sullivan harnesses the views of small businesses and translates that grassroots power into federal policies that bolster free enterprise and reward entrepreneurship. He runs the U.S.

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