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America’s small companies are planning to hand out fewer raises in the next few months as the still-tight U.S. job market becomes a little more loose. That’s the message in the latest monthly employer survey from the National Federation of Independent Business, due out later today. NFIB Chief Economist William Dunkelberg reports on the organization’s new measurement for the overall health of the labor market at small firms: The Employment Index fell in March, from 103.5 to 101.6. While the 1.9-point decline is
a meaningful turn in labor market conditions, the current reading remains above both the 2025 average of 101.2 and the historical average of 100. This decline is indicative of further moderation in the labor market. The NFIB index combines actual and planned changes in employment plus employee compensation into a single reading. A higher reading reflects a tighter labor market—more demand for workers. March’s lower reading reflects that owners had a slightly easier time filling open positions, were slightly less likely to raise wages and also scaled back their plans for future wage hikes. Mr. Dunkelberg notes: In March, reports of unfilled job openings showed little change. Thirty-two percent (seasonally adjusted) of small business owners reported job openings they could not fill in the current period, down 1 point from February. Unfilled job openings remain above the historical average of 24%.
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