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.

U.S. Small Business Optimism Index Reaches 100.3 in July 2025

The NFIB Small Business Optimism Index has risen by 1.7 points in July 2025 to reach a score of 100.3. This marks a significant increase above the 52-year average of 98 and indicates a modest recovery in business confidence among small business owners. This is the highest rating for the index since February 2025, suggesting a slight uptick in overall optimism.

Among the survey respondents, 21% reported that the quality of labor is their most pressing concern, emphasizing the ongoing struggle to find qualified workers. The Uncertainty Index has also seen an increase, climbing eight points to 97, which reflects growing concerns regarding the economic environment influenced by various factors, including tariffs and changes in labor policies.

The business sentiment shows signs of improvement as 13% of business owners rated their business health as excellent, whereas the majority, 52%, considered it good. Additionally, a net of 14% of owners plan to create jobs in the next three months, exceeding the historical average of 11%.

Despite the optimism, businesses continue to face challenges, particularly in staffing. Currently, 33% of job openings remain unfilled, which is especially prominent in the construction and retail sectors.

Price pressures also remain a concern, with a net 28% of owners planning to increase prices in response to ongoing inflation, even though the percentage of businesses reporting higher average selling prices has decreased. The NFIB survey indicated that 12% of owners have noticed lower average selling prices, while 37% reported price increases, demonstrating a mixed pricing environment.

In capital spending, 55% of small business owners reported expenditures in the past six months, showing a willingness to invest despite the persistent climate of uncertainty. Furthermore, there has been a slight decrease in the percentage of business owners experiencing heightened labor costs, though labor costs remain a significant concern for 9% of owners.

Small businesses are also mindful of ongoing policy risks, particularly regarding the potential lasting effects of a 20% small business deduction, which could significantly impact their operational strategies. The overall small business landscape remains complex, with varying conditions across different sectors and external economic challenges ahead.

Key Highlights

• NFIB Small Business Optimism Index stands at 100.3, rising 1.7 points
• Labor Quality reported as the major issue by 21% of owners
• Uncertainty Index increased to 97
• 13% rated business health as excellent; 52% as good
• Job Creation: net 14% of owners planning to hire
• 33% of job openings remain unfilled
• 28% planning price increases in response to inflation
• Capital expenditure at 55% of owners
• 9% of owners report rising labor costs

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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