The National Federation of Independent Business small business optimism index rose to its highest level in six months, as owners reported stronger sales and improved outlook for the economy.

The index climbed 3.2 points to 94.8, driven by improvements in real sales expectations and plans for capital spending. However, labor quality remained the top concern for 42% of respondents.

Small businesses are benefiting from resilient consumer spending, which has remained strong despite higher interest rates and inflation. Retail sales data released last week showed a 0.4% increase in April.

Economists cautioned that the optimism could be premature if inflation remains sticky and the Fed delays rate cuts into next year. The next NFIB survey will be released in early July.