The National Federation of Independent Business (NFIB) says that small business owners are a bit rosier on the outlook of the economy, according to the latest NFIB Small Business Economic Trends report, which includes the Optimism Index. The Index shows that confidence rose 2.4 points last month to 99.8 (the 52-year average is 98.0), the best score since August 2025. Conversely, the Uncertainty Index continues to remain high, rising 2.0 points from June to 91 (historical average is 68).
According to the report, small business owners were optimistic on eight out of 10 measures, with only “Expect Real Sales Higher” and “Current Inventory-too low” falling slightly by two points. All other measures rose during the month.
“Small business optimism rose again in July, with a significant increase in owners expecting to hire, accompanied by an improvement in plans to make capital expenditures,” said NFIB Chief Economist Bill Dunkelberg about the report. “Although uncertainty is currently elevated, Main Street anticipates that business conditions will continue to improve.”
Noted key findings according to the report:
- The top reported issue in July was labor quality or availability. 27% of small business owners cited “labor quality or availability” as their single most important problem in July, up 8 points from June and 15 points above the historical average of 12%.
- 36% (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up 4 points from June and the highest reading since June 2025.
- Looking ahead, a seasonally adjusted net 20% of owners plan to create new jobs over the next three months, up 9 points from June. Hiring plans are at their highest level since October 2022 and are 9 points above the historical average.
- In July, both actual and planned price increases dropped notably from June. The net percent of owners raising average selling prices fell 7 points from June to a net 31% (seasonally adjusted), after four consecutive months of increases. Looking forward to the next three months, a net 28% (seasonally adjusted) plan to increase prices, down 4 points from June.
- Reports of inflation as the single most important problem fell for the first time this year. 14% of business owners cited inflation as their single most important business problem, down 7 points from June’s highest reading since October 2024.
- 25% (seasonally adjusted) said they plan to make capital outlays in the next six months, up 5 points from June and the highest reading since December 2024.
The full report is available here.
Visit nfib.com for more information.
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