The NFIB Small Business Optimism Index rose to 99.8 in July after a 2.1-point rebound to 97.4 in June, according to the National Federation of Independent Business’ Small Business Economic Trends survey, indicating that small business sentiment improved to the highest level since August 2025. The index was above its 52-year average of 98.0 percent. first time since February and above a low of 88.5 in March 2024, although below 100.3 in July 2025 and a high of 105.1 in December 2024. Eight of the 10 components of the index rose, while two fell. The NFIB Small Business Uncertainty Index improved to 91 in July after a two-point drop to 89 in June, remaining well above its historical average of 68. The index rose from its recent low of 84 in December 2025 and a low of 65 in November 2023, although below its historical high of 110 in October 2024.
The outlook for business conditions over the next six months remained positive for the 21st consecutive month in the latest survey. The net balance of respondents who expect the economy to improve rose to 15% in July, a five-month high, after a 10-point recovery to 13% in June; these readings were well below a high of 52% in December 2024, but significantly above a record low of -61% in June 2022. Expected actual sales declined to a net 7% in July from a five-month high of 9% in June; the latest figure was below a high of 22% in December 2024, but above a low of -18% in August 2024. A net -4% of respondents reported higher nominal sales in the last three months, unchanged from June; the latest result remained above a low of -20% in October 2024, but below the recent positive reading of 1% in February and a high of 9% in June 2021.
Plans to expand the business advanced to 12% in July, a five-month high, from 8% in June; the latest figure was below a high of 20% in December 2024, but above a low of 2% in March 2023. Plans to make capital outlays rose to 25% in July, the highest reading since December 2024, from 20% in June; these figures were still below a high of 28% in November 2024 and a high of 31% in October 2021. Expected credit conditions increased to -4% in July from -5% in June; this result was slightly below a high of -2% in December 2024, but above a low of -11% in November 2023. Meanwhile, a net -2% of respondents considered current inventories to be “too low” in July, up from 0% in June (matching the highest reading since August 2025); the 1% positive reading was recorded in May 2025.
On the labor front, 51% of respondents reported that it was difficult to find qualified workers to fill vacant positions in July, unchanged from June and recording the highest level since September 2024. These figures were above a low of 43% in August 2025, but below a high of 56% in August 2024 and a high of 62% in September 2021. A net 20% planned to increase the employment in July, compared to 11% in June. and equaling the highest level since October 2022; remained above a low of 11% in March 2024, but below a high of 32% in August 2021. Notably, 36% reported positions that could not be filled in July, up from 32% in June and matching the highest reading since June 2025; These figures remained below a peak of 51% in May 2022.
Overall earnings trends had remained in negative territory since December 2019. The measure rose to -16% in July after a five-point drop to -20% in June. These readings were below the most recent high of -14% in February and -5% in June 2021, but above the low of -37% in August 2024.
Regarding prices, actual and expected sales prices remained at an inflationary level, indicating that inflationary pressures continue, although at a slower pace of increase. The net percentage of companies raising their average selling prices fell to a still-high 31% in July, the lowest level since April and the first month-on-month drop since February, after a two-point rise to 38% in June. The latest reading was above a low of 20% in August 2024, but well below a high of 66% in March 2022. The percentage planning to raise prices fell to 28% in July, a three-month low, after a two-point drop to 32% in June; These readings remained above a low of 21% in April 2023.
Wage inflation remained relatively high in the July survey. A net 31% of respondents increased pay over the past three months, up from 28% in June and matching May’s reading. It was above a low of 26% in November 2025, but below a high of 46% in February 2023 and a high of 50% in January 2022. A net 19% of companies planned to increase worker pay in the next three months, up from 17% in June and the highest level since February; this remained below highs of 28% in November 2024, 30% in November 2023 and 32% in October 2022.
Workforce quality was cited as the most important issue facing small businesses, as reported by 27% of NFIB members in July, up from 19% in June and reaching the highest level since October 2025. Taxes ranked second as the next most important issue, as reported by 16% of respondents in July, up from 19% in June and May and representing the lowest level since November 2025. 2025. Inflation also remained a key challenge for small businesses, as reported by 14% of respondents in July, the lowest since March, down from 21% in May (the highest since October 2024); these readings were well below a high of 37% in July 2022. Other concerns (in July vs. June) included labor costs (8% vs. 8%), insurance cost/availability (8% vs. 8%), poor sales (8% vs. 7%), government requirements (7% vs. 8%), and competition from large companies (7% vs. 5%).
According to the Small Business Administration, there are 33 million small businesses in the United States, employing 62 million workers. The NFIB surveys between 500 and 2,000 respondents each month and the typical company employs 10 people and reports gross sales of about $500,000 a year. NFIB figures can be found at Haver’s SURVEYS database.