Small business optimism held at a 104.5 level in May, the National Federation of Independent Business said Tuesday.

"The remarkable surge in optimism that began last year right after the election shows no signs of slowing down" said NFIB President and CEO Juanita Duggan. "Small business owners are highly encouraged by the president's regulatory reform agenda, and they remain optimistic there will be tax reform and health-care reform. This is a policy-driven phenomenon."

Five of the Index components posted a gain, four declined, and one was unchanged.

"The tight labor market has been a persistent problem for small business owners for the past several months, and the problem appears to be getting worse," said NFIB Chief Economist Bill Dunkelberg. "It's forcing small business owners to increase compensation, which we're seeing in this data, to attract new workers and keep the ones they have. But it also means a lot of small business owners are short-handed. They can't keep up with customer demand because the labor pool isn't producing enough qualified workers. It's a significant structural problem in the economy that policymakers will have to watch."

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