Despite sluggish job creation and declining consumer sentiment, small business owners are growing more optimistic about the economic outlook. The National Federation of Independent Business (NFIB) reported that its Optimism Index rose to 100.8 in August, up from 100.3 in July, marking the highest level since January and sitting above the 52-year average of 98.
Six out of ten components of the index either improved or held steady. Around 34% of surveyed entrepreneurs expect overall economic conditions to improve in the coming months, while 12% anticipate higher sales for their own businesses. This positive sentiment has translated into concrete plans: 21% intend to make capital investments this year, 15% plan to hire additional staff, and 14% view the current climate as favorable for expansion.
NFIB Chief Economist Bill Dunkelberg attributed the uptick to stronger sales expectations and better earnings. However, labor quality remains a persistent challenge, with over one-third of respondents unable to fill open positions—though this marks a slight improvement from 35% in July.
The optimism extends beyond NFIB’s findings. Comerica Bank’s inaugural Small Business Pulse Index revealed that 81% of entrepreneurs expect sales growth over the next 12 months, and 83% are confident in their company’s long-term success. About two-thirds believe business conditions will improve in the near term.
Nonetheless, uncertainties remain. Concerns about import tariffs affecting profitability, consumer spending, and broader economic performance kept the index’s uncertainty measure at 93—its 11th-highest level in over 50 years, though down from 97 in July.
Recent government data revisions have added context: the BLS adjusted job creation downward by 911,000 for the year ending March 2025, a larger revision than the previous year’s 818,000 cut. Despite these signs of a cooling labor market, small business leaders remain hopeful, citing potential improvements in sales and tax policies by year-end.
Mark Valentino, head of business banking at Citizens, noted that the resilience shown by small firms so far supports their cautious optimism. Still, many are managing expenses prudently, hiring selectively, and maintaining tight control over debt.
— news from Inc.com
— News Original —
Entrepreneurs Are More Optimistic Despite Fears of Economic Slowdown. Here’s Why
Despite flatlining U.S. job creation rates and declining consumer confidence, Main Street entrepreneurs are more optimistic than they’ve been since January. Small business owners expect that both their own companies and broader economic growth will improve in the next few months, accounting for their improved outlook, according to recent surveys. n nThe latest of those upbeat polls came with this week’s release of the National Federation of Independent Business’s (NFIB) Optimism Index results for August. The survey found member confidence rose last month to 100.8 points, half a point higher than in July. That lifted the indicator three points above than its 52-year average level of 98, and nearly back up to its January 2025 apex of 102.8. n nSix of the 10 categories that make up the broader Optimism Index either increased or remained stable in August. n nAbout 34 percent of respondents said they expect the economy to improve in coming months, and 12 percent also anticipated their own companies would benefit from increased sales. That confidence in the medium-term future led 21 percent of participants saying they plan to making capital outlays sometime this year, and 15 percent expect to hire new employees. Another 14 percent said the current environment made it a good time to expand their business. n nFeatured Video n nAn Inc.com Featured Presentation n n“Optimism increased slightly in August with more owners reporting stronger sales expectations and improved earnings,” said NFIB Chief Economist Bill Dunkelberg. “While owners have cited an improvement in overall business health, labor quality remained the top issue on Main Street.” n nThe longstanding difficulty in hiring qualified workers remained a sore point for Main Street companies. Just over a third of survey participants said they were unable to fill positions they had available last month, down slightly from 35 percent in July. That frustrated willingness of entrepreneurs to hire new employees contrasted with the decreasing rates of new job creation nationally. That fell to 22,000 in August, and has averaged just 26,750 new posts created each month since May. n nMeanwhile, a revision of government employment data released on Tuesday indicated that the labor market apparently began to soften last year. The Bureau of Labor Statistics said that between April 2024 and March 2025, U.S. employers created 911,000 fewer jobs than the 1.75 million positions it originally estimated. That adjustment was even bigger than 818,000 downward revision the agency made last year. n nYet despite sluggish job creation and other indicators stoking fears that the economy may be slowing, the improving outlook of entrepreneurs was reflected beyond the NFIB’s survey. n nComerica Bank’s inaugural Small Business Pulse Index released last month found 81 percent of entrepreneur respondents expecting sales growth over the next year. Another 83 percent of participants said they were confident of their companies’ future success, and around two-thirds believed conditions for their business to grow will improve over the next several months. n nHowever, the NFIB survey found some areas still troubled respondents. Doubts about how import tariffs may affect companies’ bottom lines, consumer spending, and even economic growth kept the “uncertainty” metric in the index at 93 points. While that was down four points from July, it was still its 11th-highest reading in over five decades. n n“Owners are optimistic about improving business conditions by year end, hopefully stronger sales and more favorable tax rules,” an NFIB analysis of the survey said. “For now, the economy is on a good footing, but small business owners are hoping that their ‘uncertainties’ will be favorably resolved.” n nSome small business experts believe that entrepreneurs’ successes riding out those uncertainties so far this year will justify their growing optimism for the future. n n“The steady rise in small-business optimism is a promising sign of the resilience and entrepreneurial spirit of America’s business owners,” Mark Valentino, head of business banking at Citizens, told Inc. in emailed comments on the NFIB survey. “Yet even as confidence improves, challenges loom and opportunities remain. Many small business owners are approaching economic uncertainty with caution, reevaluating expenses, hiring selectively, and managing debt with discipline.”