NFIB Reports Small Business Optimism On The Rise Again

The National Federation of Independent Business’s Small Business Optimism Index rose 2.4 points in July to 99.8, rising above its 52-year average of 98.0 and marking the highest level since August 2025.

The NFIB also says, of the 10 Optimism Index components, eight increased while only two decreased.

Contributing most to the rise in the Index were hiring plans which improved substantially while real sales expectations and reports of inventory levels as “too low” both fell by 2 points.

At the same time, the Uncertainty Index rose 2 points from June to 91, remaining well above its historical average of 68. That rise was driven by an increase in owners reporting uncertainty about whether it’s a good time to expand.

The rise in the Small Business Optimism Index level comes on the heels of the NFIB’s monthly jobs report reflecting an increase for the first time in five months.

Here’s the full report:

The NFIB Small Business Optimism Index rose 2.4 points in July to 99.8, rising above its 52-year average of 98.0. This marks the highest level since August 2025. Of the 10 Optimism Index components, eight increased, and two decreased. Hiring plans improved substantially and contributed most to the rise in the Index. Real sales expectations and reports of inventory levels as “too low” both fell by 2 points. The Uncertainty Index rose 2 points from June to 91, remaining well above its historical average of 68. The rise was driven by an increase in owners reporting uncertainty about whether it is a good time to expand and capital expenditure plans.

As reported in NFIB’s monthly Jobs Report, the NFIB Small Business Employment Index rose after four consecutive months of decline, registering 102.1 in July. A seasonally adjusted 36% of small business owners reported job openings they could not fill, up 4 points from June and the highest reading since June 2025.

“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. “Although uncertainty is currently elevated, Main Street anticipates that business conditions will continue to improve.”

“There are quite a few positive signs in this report for Main Street,” NFIB State Director Brad Jones said. “While inflation remains a challenge, those cost pressures are starting to ease. Small business owners remain cautiously optimistic about the economy and are making plans to hire and invest in their operations.”

Key findings include:

• In July, the top reported issue was labor quality or availability. Twenty-seven percent 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%.
• Thirty-six percent (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. Fourteen percent of business owners cited inflation as their single most important business problem, down 7 points from June’s highest reading since October 2024.
• Twenty-five percent (seasonally adjusted) of small business owners plan to make capital outlays in the next six months, up 5 points from June and the highest reading since December 2024.
• The net percent of owners expecting higher real sales volumes over the next quarter fell 2 points from June to a net 7% (seasonally adjusted).
• The frequency of reports of positive profit trends improved 4 points from June to a net negative 16% (seasonally adjusted).

Click here to view the entire NFIB SBET Report.

The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in July 2026.

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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.