The share of U.S. small-business owners planning to raise worker compensation fell in May to a more than three-year low, indicative of a cooling jobs market and moderating wage pressures. 

Some 18% of firms said they intend to boost pay in the next three months, down 3 percentage points from April and the smallest share since March 2021, according to data out Thursday from the National Federation of Independent Business. A net 37% said they raised compensation, down slightly from the prior month but still historically elevated.

A net 15% indicated they expect to hire in the next three months. While that’s the highest print so far this year, the share of firms planning to hire is below pre-pandemic levels. The government’s May employment report on Friday is expected to show a broad moderation in job growth.

The share of small businesses with open positions they’re unable to fill climbed to 42% last month, the highest since October. The labor market remains particularly tight in construction, manufacturing and transportation, the report said. 

“An exceptionally high number of small businesses are still struggling to fill open positions,” Bill Dunkelberg, the NFIB’s chief economist, said in a statement. “Although plans to increase compensation have fallen, small firms continue in their efforts to attract and retain workers.”

This article was provided by Bloomberg News.