The NFIB Small Business Optimism Index climbed 1.7 points in July to 100.3, marking an uptick in owner sentiment above the 52-year average of 98. Small Business Optimism among respondents grew as those reporting better business conditions jumped 14 points from June to a net 36 percent, suggesting a more positive outlook among small firms.
Small Business Confidence Climbs
Owners who cited improving business conditions rose sharply in July. A net 36 percent of respondents said conditions had gotten better, compared with 22 percent in June. That gain helped lift the overall index above its long-term norm. The passage of the One Big Beautiful Bill in early July likely boosted sentiment, as did record highs in major stock market indices. NFIB’s report noted that policymakers and market gains may have eased some concerns about future growth, encouraging owners to view prospects more favorably. The increase follows a nearly flat reading in June, signaling renewed confidence after a period of uncertainty.
Optimism and Uncertainty Coexist
Despite rising optimism, uncertainty remained elevated. The NFIB Uncertainty Index surged eight points from June to 97, as trade tensions and inflation worries lingered. Tariffs on imported goods and ongoing price pressures continued to cloud the outlook for many owners. Eleven percent of small-business operators said inflation was their single most important problem, a share unchanged from June. That figure underscores that, even as confidence grows, cost concerns persist and shape decision-making across sectors.
Optimism Tested by Inflation
Price-setting plans also reflected mixed signals. The net percentage of owners raising average selling prices fell five points to a net 24 percent in July. Meanwhile, 28 percent said they planned to increase prices in the next three months, down four points from June. Although these intentions remain well above historical averages, the slight pullback may indicate that firms expect inflationary pressures to ease or face resistance from customers. Persistent inflation could still force broader price adjustments in coming months.
Small business owners will be watching policy moves and economic indicators closely. While legislative action and market strength have lifted sentiment, rising uncertainty and inflation concerns suggest the recovery may face headwinds. For now, the NFIB index shows that owner confidence remains resilient, even as businesses navigate evolving challenges.
For more details, visit the NFIB survey page: https://www.nfib.com/surveys/small-business-economic-trends/
