US Small-Business Optimism Hits 11-Month High as Hiring Plans Strengthen

U.S. small-business confidence strengthened in July, with the Small Business Optimism Index rising 2.4 points to 99.8, according to the National Federation of Independent Business (NFIB). The reading was the highest since August 2025 and moved above the index's long-term average of 98.0.

Hiring intentions also improved during the month. The NFIB's employment index climbed 1.9 points to 102.1 after declining for four consecutive months. The percentage of small-business owners planning to add jobs over the next three months rose 9 percentage points to 20%, marking its highest level since October 2022.

However, businesses continued to face uncertainty around workforce availability. The share of owners reporting job openings that they were unable to fill increased by 4 points to 36%, the highest level since June 2025. The vacancies covered both skilled and unskilled positions.

Labor availability was identified as the biggest problem for small-business owners in July, with 27% naming labor quality or availability as their main concern. That compares with a historical average of 12%. Business owners across industries including construction and agriculture reported increasing difficulty finding qualified workers.

The survey's uncertainty index also rose by 2 points to 91, reflecting greater uncertainty about whether it was a suitable time to expand and about capital spending plans. NFIB Chief Economist Bill Dunkelberg linked the elevated uncertainty largely to the status of the war with Iran.

The latest survey follows a government report showing an unexpected decline in U.S. nonfarm payrolls in July, alongside significant downward revisions to May and June employment figures. Some economists linked the payroll decline to worker shortages.

Meanwhile, concerns about inflation eased in July. The percentage of small businesses identifying inflation as their biggest problem fell to 14%, down 7 percentage points from June and marking the first decline in that measure this year.