The NFIB Small Business Optimism Index rose 2.4 points in July to 99.8, climbing above its 52-year average of 98 and reaching its highest level since August 2025.
Eight of the index’s 10 components increased, while two declined. Improved hiring plans contributed most to the overall increase. Expectations for real sales and the share of owners reporting inventory levels as “too low” each fell 2 points.
The NFIB Uncertainty Index rose 2 points from June to 91, remaining well above its historical average of 68. NFIB attributed the increase to more business owners expressing uncertainty about whether it is a good time to expand and about their capital spending plans.
According to NFIB’s monthly Jobs Report, the NFIB Small Business Employment Index rose after four consecutive months of declines, reaching 102.1 in July. A seasonally adjusted 36 percent of small business owners reported job openings they could not fill, up 4 points from June and the highest level since June 2025.
“Small business optimism rose again in July, with a significant increase in owners expecting to hire, accompanied by an improvement in plans to make capital expenditures,” NFIB Chief Economist Bill Dunkelberg said.
“Although uncertainty is currently elevated, Main Street anticipates that business conditions will continue to improve,” Dunkelberg said.
NFIB State Director Rosemary Elebash said Alabama businesses are seeing similar trends.
“Our members are feeling more upbeat, and it’s encouraging to see more owners planning to hire. The challenge, though, is that it’s still hard for many of them to find qualified workers to fill those positions,” Elebash said.
Labor quality and availability ranked as the most commonly cited problem among small business owners in July. Twenty-seven percent identified labor quality or availability as their single most important problem, up 8 points from June and 15 points above the historical average of 12 percent.
A seasonally adjusted 36 percent of owners reported job openings they could not fill, up 4 points from June. A seasonally adjusted net 20 percent said they planned to create new jobs over the next three months, up 9 points from June. Hiring plans reached their highest level since October 2022 and stood 9 points above the historical average.
Both actual and planned price increases declined from June. The net share of owners raising average selling prices fell 7 points to a seasonally adjusted 31 percent after four consecutive months of increases.
A seasonally adjusted net 28 percent of owners said they planned to raise prices over the next three months, down 4 points from June.
Inflation also declined as a concern for the first time this year. Fourteen percent of business owners identified inflation as their single most important problem, down 7 points from June, when the measure reached its highest level since October 2024.
A seasonally adjusted 25 percent of small business owners said they planned to make capital expenditures in the next six months, up 5 points from June and the highest reading since December 2024.
The net share of owners expecting higher real sales volumes during the next quarter fell 2 points from June to a seasonally adjusted 7 percent.
Reports of positive profit trends improved 4 points from June to a net negative 16 percent.
The NFIB Research Center has collected Small Business Economic Trends data through quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. Respondents are randomly selected from NFIB’s membership.
NFIB releases the report on the second Tuesday of each month. The latest survey was conducted in July 2026.
