Small Business Optimism in United States Drops to Six-Month Low: Report

(small.news) — The Small Business Optimism Index, created by the National Federation of Independent Businesses, fell in October by 0.6 points.

This brought the total number down to 98.2, which is still above the 52-year average of 98, according to NFIB. However, the Uncertainty Index fell 12 points when compared to September to 88. This is the lowest reading so far in 2025.

NFIB Chief Economist Bill Dunkelberg explained, “Optimism among small businesses declined slightly in October as owners report lower sales and reduced profits. Additionally, many firms are still navigating a labor shortage and want to hire but are having difficulty doing so, with labor quality being the top issue for Main Street.”

Small Businesses Dealing With Labor Quality Issues

The NFIB’s survey found several interesting statistics. For example, 32% (seasonally adjusted) of small business owners said they had job openings that they couldn’t fill, which was the second month in a row that this was reported. Before August, the NFIB claims that unfilled job openings hadn’t been at 32% since December of 2020.

Small business owners are also worried mostly about labor quality, as 27% of owners put it as their most important problem. This is 9 points higher than in September, and the highest number recorded since the record of 29% in November of 2021.

Of those who were hiring in October (56%), 88% claimed there were few or no qualified applicants for the positions they were wanting to fill. 15% (seasonally adjusted) of small business owners planned to create new jobs in the next three months, which is down 1 point from September. This is the first decline since the increase in May of 2025.

Small Business Owners Positive Profit Trends Falling

According to NFIB, fewer small business owners reported positive profits from September, which is down 9 points. The agency claims that this was the greatest contributor to the overall decline in the Optimism Index.

60% of small businesses also reported that disruptions to the supply chains were affecting their operations, which is down 4 points from September. All of these factors led to only 20% (seasonally adjusted) of small business owners expecting better conditions. This is the lowest level since April, according to the NFIB, but is above the net 4% historical average.

Small Business Owners Less Confident in Business Health

In October, more small business owners in NFIB’s data claimed that their business health was “fair” instead of “good.” 12% of owners said their business health was excellent, which was up by 1 point, and 51% said it was good, which was down by 6 points.

33% of owners reported that their small business health was good, which was up by 6 points, and 4% reported it as poor.