U.S. Small Business Optimism Index Reaches 100.3 in July

United States, August 12, 2025

News Summary

The NFIB Small Business Optimism Index has seen a notable increase, climbing to a score of 100.3 in July, signaling a positive shift in small business sentiment. Despite lingering concerns over labor quality and economic uncertainties, a majority report improved business health and a growing willingness to hire. However, challenges such as rising pricing pressures continue to affect many sectors, notably construction and retail. Overall, the report reflects cautious optimism among small business owners as they navigate these complex dynamics.

Small Business Confidence Climbs to 100.3 in July 2025 as Hiring and Policy Fears Persist

Key takeaway: A monthly small business sentiment measure rose to 100.3 in July 2025, up 1.7 points and above its long-term average, signaling a modest recovery in confidence. At the same time, concerns about labor quality, policy uncertainty and inflationary pressure remain strong.

Top-line results

The headline index reached 100.3, the highest level since February 2025 and above the 52-year average of 98. This movement suggests owners are feeling somewhat better about the near-term business climate. However, the survey also shows a sharp rise in worry: the survey’s Uncertainty Index climbed by 8 points to 97, reflecting stronger concerns about future policy, trade measures and labor rules.

Labor market and hiring

Labor quality was cited as the most significant problem by 21% of small business owners, highlighting persistent difficulties in finding qualified workers. Unfilled job openings stood at 33%, indicating many businesses still struggle to hire across industries, with construction and retail especially affected. Despite this, a net 14% of owners plan to create new jobs in the next three months, above the historical average of 11%, pointing to cautious hiring intentions.

Business health, expansion and investment

Owners’ views of their businesses improved: 13% rated overall business health as excellent and 52% as good. The share of respondents saying it is a good time to expand rose by 5 points to 16%. Capital spending also ticked up, with 55% of owners reporting they made capital expenditures in the past six months, signaling a willingness to invest amid ongoing uncertainty.

Prices and costs

Inflationary pressures remain mixed. A net 28% of owners plan to raise prices, even though the share reporting higher average selling prices has declined compared with earlier periods. In the survey, 37% reported higher selling prices while 12% reported lower prices, showing a varied pricing environment across sectors. The share of owners experiencing higher labor costs has fallen, yet 9% still cite labor costs as a major concern.

Sector differences and persistent pressures

Not all sectors moved the same way. Agriculture and food distribution continue to feel persistent inflationary pressure while demand in those areas is expected to remain steady. Construction and retail face the strongest hiring frictions. Overall, the picture shows pockets of strength mixed with sector-specific stress.

Policy and uncertainty

Survey respondents flagged policy risks as a central source of uncertainty. Tariffs, labor policy changes and the potential permanence of a 20% small business deduction were noted as factors shaping planning and investment decisions. The jump in the Uncertainty Index to 97 reflects how these risks are influencing owner expectations and operational choices.

What this means for the near term

The data presents a mixed but cautiously optimistic snapshot: sentiment has partially recovered, capital investment remains active, and more owners expect to hire than the historical norm. Yet rising uncertainty, hiring challenges and continued pricing pressures keep the operating environment complex. Small firms are balancing growth plans against potential policy shifts and uneven demand across industries.

Data highlights at a glance

• Optimism Index: 100.3 (up 1.7 points)
• Uncertainty Index: 97 (up 8 points)
• Labor quality major problem: 21%
• Job openings unfilled: 33%
• Owners planning to add jobs: net 14%
• Owners planning to raise prices: net 28%
• Good time to expand: 16% (up 5 points)
• Owners who spent on capital goods in last 6 months: 55%

---

FAQ

---

Key Metrics Chart

The chart below visualizes headline measures from the survey to show relative size and direction of the main issues facing small businesses.

Optimism Index (100.3) 100.3

Uncertainty Index (97) 97

Unfilled Job Openings (33%) 33%

Plan to Create Jobs (14%) 14%

Plan to Raise Prices (28%) 28%

Good Time to Expand (16%) 16%

Capital Spending in Last 6 Months (55%) 55%

Note: Bars are scaled for visual comparison; index values use a larger scale than percentages.

Summary: Confidence is up but so is uncertainty. Hiring intentions and investment are stronger than average, yet many openings remain unfilled and pricing pressures continue, producing a mixed outlook for small businesses.

Deeper Dive: News & Info About This Topic

Additional Resources

• Advisor Perspectives: NFIB Small Business Survey
• KFGO: US Small Business Optimism Up
• NFIB: Monthly Report
• Wikipedia: National Federation of Independent Business
• Google Search: Small Business Optimism Index