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• But: Only a quarter (25%) of them rated the U.S. economy as good, and 30% said the same about their local economy, both down eight points from Q3.

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Why it matters: The Index, which tracks small business sentiment, dropped to 61.3 in Q4 from 69.2 in Q3, reversing the gains made in the previous quarter.

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Be smart: Major challenges small businesses face include inflation and the worker shortage.

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• Inflation remains a top concern for 50% or more of small businesses for the sixth quarter in a row.

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• 53% of small businesses agree there is a worker shortage in their local area. Over half of the small business owners who searched for talent in 2023 say it is hard to find candidates.

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• A majority of small businesses (60%) say it is challenging to keep up with their employees’ salary expectations or demands.

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Our take: “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,” said Tom Sullivan, Chamber Vice President of Small Business Policy. “At the same time, holiday shopping is already setting records this year and most small businesses say they are doing okay despite persistent headwinds.”