The National Federation of Independent Business (NFIB) Tuesday morning reported that its small business optimism index for August rose 0.5 points from 95.4 in July to come in at 95.9. The August reading remains below the index’s 42-year average of 98.

The four “hard” measures of the index posted mixed results last month. The job creation component rose one point to 13%, the job openings component rose four points to 29%, capital spending plans remained unchanged at 24% and inventory investment plans rose one point to a level of 1%.

Some 13% of small business owners plan to raise employees’ pay in the next several months. That’s down two points compared with July on a seasonally adjusted basis, but is the lowest reading since October 2013. The report notes:

Reports of increased labor compensation were steady at a net 23 percent of all owners (seasonally adjusted), still shy of the high of 25 percent for this year. Labor costs will continue to put pressure on the bottom line.

In its commentary on the report the NFIB noted:

Clearly, from Main Street, there is no basis to expect dramatic second half growth as July and August are already unimpressive. Perhaps the large firms will “carry the water”, but with recessions springing up around the globe, this is unlikely. So the small business sector will continue plodding forward, little risk of recession but little risk of a boom as well.

The NFIB reports that 29% of business owners currently have positions open that they are unable to fill (up four points from July) and that 48% said there were few or no qualified applicants for the open positions, unchanged from the prior month.

Business owners said their single most important problem is taxes (21%), government regulations and red tape (20%) or quality of labor (14%). The least important problems are financing and interest rates (1%) and inflation (3%).

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