In September, small business optimism fell to its weakest level in three months, reflecting growing unease about the U.S. economic climate. The Small Business Optimism Index dropped to 98.8, the lowest since June, as owners voiced concerns over anticipated sales, inflation, supply chain instability, and inventory shortfalls, according to the National Federation of Independent Business (NFIB) monthly survey. The survey’s uncertainty index surged by seven points to reach 100, marking the fourth-highest level recorded in the index’s 51-year history. Only 23% of surveyed owners expect better business conditions ahead, an 11-percentage-point decline from the previous month, highlighting a lack of confidence in future policy stability. n nBill Dunkelberg, chief economist at NFIB, noted that while most small enterprises still view their current operations as sound, they are grappling with rising costs, weaker sales projections, and difficulties in staffing. Nearly two-thirds of small businesses—64%—reported ongoing supply chain issues, a 10-point jump from August. Inventory levels were deemed too low by 7% of owners, the sharpest monthly drop ever recorded in the survey. Price increases were implemented by 24% of firms in September, up three percentage points, and 31% plan further hikes in the coming quarter. n nDespite these challenges, some positive signals emerged. Hiring intentions reached their highest point since January, and the share of businesses reporting profits exceeded those reporting losses at the strongest rate since 2021, suggesting underlying resilience even amid headwinds.
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Small Business Owners Are Increasingly Worried About Economic Conditions
Small business owner optimism in September sank to its lowest level in three months as concerns mount about the direction of the U.S. economy. n nThe Small Business Optimism Index declined to 98.8, its lowest level since June, as owners expressed fears about future sales levels, inflation, supply chain disruptions and inventory levels, according to the monthly survey by the National Federation of Independent Business. n nBusiness owners were concerned enough about the economy to push the survey’s uncertainty index up seven points to hit 100, the fourth highest reading ever in the survey’s 51-year history. n nBusiness owners are hoping for clarity on tariffs and other economic policies from the Trump administration. The September survey revealed that only 23% of business owners anticipate improved business conditions in the future, a 11 percentage point decline from August. n n“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,” NFIB Chief Economist Bill Dunkelberg wrote in the report. “Although uncertainty is high, small business owners remain resilient as they seek to better understand how policy changes will impact their operations.” n nBusiness Owners Expect Supply Chain Disruptions, Price Increases n nSupply chain disruptions were a problem for 64% of small businesses, an increase of 10 percentage points from August levels. Along those same lines, 7% of business owners reported that inventory levels were too low, reflecting the largest monthly drop in the survey’s history. n nNearly a quarter of small businesses reported raising prices in September, a three percentage point increase, while 31% indicated plans to raise prices in the next three months. n nStill, the report showed that business owners had some optimism about future conditions. Hiring plans were at their highest levels since January, while the number of business owners reporting profits versus those reporting losses was at the highest point since 2021.