Follow Four Months Of Decline The NFIB’s Small Business Index Moves Up Slightly

After four consecutive months of decline, the National Federation of Independent Business’s Small Business Employment Index inched up to 102.1 in July after measuring 100.2 in June

The report shows a seasonally-adjusted 36 percent of small business owners not being able to fill job openings in July…up four points from June and the highest reading since June of 2025.

31 percent have openings for skilled workers, up four points, while 14 percent have openings for unskilled labor, up two points.

The current reading is above the 2025 average of 101.2 and the historical average of 100.0.

The full Jobs Report can be found below:

NFIB’s July Jobs Report shows that the Small Business Employment Index rose after four consecutive months of decline, registering 102.1 in July after measuring 100.2 in June. The current reading is above the 2025 average of 101.2 and the historical average of 100.0.

In July, 36% (seasonally adjusted) of small business owners reported job openings they could not fill, up 4 points from June and the highest reading since June 2025. Thirty-one percent have openings for skilled workers (up 4 points), and 14% have openings for unskilled labor (up 2 points).

“Labor quality or availability as the top concern for Main Street rose in July, with employment growth falling behind the pace of economic growth,” said NFIB Chief Economist Bill Dunkelberg. “Most of the primary spending driving the economy is heavily concentrated in big projects like new data centers for AI. Hiring plans suggest that small business owners are expecting a surge in business that will require more workers. While the labor force remains stagnant, hiring will be sufficient to keep the unemployment rate about the same as compensation inches higher.”

“Our members want to hire, but they are having a hard time finding the right workers,” NFIB State Director Brad Jones said. “This is a challenge we’re seeing across the state. When small business owners can’t fill their open positions, that can cause a ripple effect of tough choices, like cutting hours, reducing services, or raising prices to offset increased compensation costs.”

A seasonally adjusted net 20% of owners plan to create new jobs in 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 contrast to the forward-looking plans, actual hiring activity declined 1 point from June, with 61% of owners reporting hiring or trying to hire in July. Fifty-one percent of owners (85% of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill (unchanged). Thirty-two percent reported few qualified applicants (up 5 points), and 19% reported none (down 5 points).

In July, 27% of small business owners cited “labor quality or availability” as their single most important problem, up 8 points from June and 15 points above the historical average of 12%. While reports of labor quality or availability as the single most important problem rose in July, reports of labor costs were unchanged with 8% of business owners reporting labor costs as their single most important problem.

In July, both labor compensation measures rose. A seasonally adjusted net 31% reported raising compensation, up 3 points from June. A net 19% (seasonally adjusted) plan to raise compensation in the next three months, up 2 points from June. Both actual and planned compensation changes are above their historical average.

CLICK HERE to view the entire NFIB Jobs Report.

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For over 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is nonprofit, nonpartisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses, and remains so today. For more information, please visit nfib.com.