NFIB Small Business Optimism Index Improves in June

On Tuesday, the National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index (SBOI) rose 2.1 points to 97.4 in June. The index was 0.6 points below its 52-year average of 98. Expectations for better business conditions and higher real sales primarily drove the increase.

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

Other highlights from the June SBOI include:

• Employment: The NFIB Small Business Employment Index was little changed at 100.2.
• Job openings: A seasonally adjusted 32% of owners reported job openings they could not fill, up 3 points from May’s lowest reading since May 2020. A seasonally adjusted net 11% planned to create jobs over the next three months, up 2 points.
• Inflation: Twenty-one percent of owners cited inflation as their single most important business problem, up 3 points and the highest reading since October 2024.
• Selling prices: The net share of owners raising average selling prices rose 2 points to a seasonally adjusted 38%, the fourth consecutive monthly increase and the highest level since January 2023. A seasonally adjusted net 32% planned to raise prices over the next three months, down 2 points.
• Business conditions: The net share of owners expecting better business conditions over the next six months rose 10 points to a seasonally adjusted 13%, improving for the first time this year.

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

“Current economic conditions present small business owners with both encouraging developments and ongoing challenges. Lower fuel costs provide welcome relief for businesses as well as consumers, with firms anticipating improved operating conditions over the next six months. While there have been improvements in the overall environment, high interest rates and modest economic growth are causing owners to approach hiring and capital spending with caution.”