In October, U.S. small business sentiment extended its decline for the third consecutive month, hinting at the enduring impact of inflation and labor challenges on business earnings, as reported by the National Federation of Independent Business (NFIB). The NFIB index dipped to 90.7 from September's 90.8, maintaining its position below the 50-year average of 98 for the 22nd consecutive month. Concerns over a tightening labor market and inflation have eroded optimism since reaching a peak in July. The net share of businesses reporting higher profits plummeted by 8 points in October, reaching a net negative 32%. Small business owners are cautious about future business conditions due to weakening sales, increased input costs, economic uncertainty, higher borrowing costs, and potential recession projections. Labor shortages in construction, transportation, and services, along with price hikes in finance and retail sectors, persist as the Federal Reserve's rate hike pace moderates.