NFIB Small Business Optimism Index Falls in August

On Tuesday, the National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index (SBOI) fell 1.1 points to 98.7 in August, remaining just slightly above its 52-year average of 98.

The NFIB Uncertainty Index fell 2 points to 89, but remained well above its historical average of 68.

Other highlights from the August SBOI include:

• Labor quality and costs: Reports of “labor quality or availability” and “labor costs” as owners’ single most important problem eased in August, with “labor costs” falling to its lowest level since March 2021. Labor quality or availability remained well above its long-term average.
• Business conditions: Expectations for better business conditions fell 5 points to a seasonally adjusted net 10% but remained above the average of net 4%.
• Overall business health: 11% of owners rated their business health as excellent, down 3 points; 57% rated it good, up 2 points; 28% rated it fair, up 2 points; and 3% rated it poor, down 1 point.
• Actual sales: A seasonally adjusted net negative 9% of owners reported higher nominal sales over the past three months, down 5 points from July and the lowest reading since November 2025.
• Inflation: 16% of owners cited inflation as their single most important problem, up 2 points and tied with taxes as the second-leading small business issue.
• Supply chains: 62% of small business owners reported that supply chain disruptions affected their business to some extent, down 1 point from July.

In remarks accompanying the release, NFIB Chief Economist Bill Dunkelberg said:

“Uncertainty remains elevated among small business owners as they face a mixed set of challenges with weakened sales, supply chain disruptions, and inflation pressures. While expectations for the overall economy dimmed, Main Street owners remain largely positive in the health of their own businesses.”