The National Federation of Independent Business (NFIB) Small Business Optimism Index dropped two points in September to 98.8, marking the first decline in three months but remaining above the survey’s 52-year average of 98. The Uncertainty Index rose seven points to 100, the fourth-highest level in more than five decades.
“Optimism among small business owners decreased in September,” said NFIB Chief Economist Bill Dunkelberg. “While most owners evaluate their own business as currently healthy, they are having to manage rising inflationary pressures, slower sales expectations, and ongoing labor market challenges. Although uncertainty is high, small business owners remain resilient as they seek to better understand how policy changes will impact their operations.”
Key findings from the September survey include:
- Inflation pressures: Fourteen percent of owners cited inflation as their most important business problem, up three points from August. A net 24% reported raising average selling prices, and 31% plan to do so in the next three months.
- Supply chain and inventory: Sixty-four percent of owners reported supply chain disruptions, up 10 points from August. Inventory levels fell sharply, with a net negative 7% viewing current stocks as “too low,” the largest monthly decline on record.
- Labor conditions: Eighteen percent of owners cited labor quality as their top problem, tying with taxes. Thirty-two percent reported job openings they could not fill, and 88% of those hiring said qualified applicants were scarce. A seasonally adjusted 16% plan to create new jobs in the next three months, the highest level since January.
- Earnings and sales: The share of owners reporting higher profits rose three points to the strongest level since December 2021, though a net negative 7% reported higher sales in the past three months.
- Borrowing and costs: Seven percent of owners said their last loan was harder to obtain, the highest reading this year. The average interest rate on short-term loans rose to 8.8%.
- Expansion outlook: Eleven percent said it was a good time to expand, down three points from August, reflecting a more cautious outlook.
Taxes and labor quality tied as the most frequently cited business challenges, while only 6% identified government regulations as their top concern.
The NFIB has tracked small business economic trends since 1973. The September 2025 report is based on survey data collected from NFIB members nationwide.