The NFIB Small Business Optimism Index increased by 0.5 points in August to reach 100.8, remaining above its long-term average. The latest survey showed mixed results across the ten index components, with four improving, four declining, and two unchanged. A key driver of the rise was an increase in the number of owners expecting higher real sales.
The Uncertainty Index dropped by 4 points to 93 but stayed above its historical average, mainly due to less uncertainty about financing and planned capital expenditures.
“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.”
In August, small business owners reported improvements in their perception of business health: 14% rated it as excellent and 54% as good. Those rating it as fair declined to 27%, while poor ratings held steady at 4%.
Labor quality continued to be the most frequently cited problem among small businesses, with 21% naming it as their primary challenge—unchanged from July.
Job openings that could not be filled dropped slightly to a seasonally adjusted 32%, marking the lowest level since July 2020. In construction, nearly half of firms still had unfilled positions, though this figure has fallen compared to last year.
A net 12% of owners expect higher real sales volumes in the coming months—a six-point gain over July—while inventory levels were generally seen as adequate.
Owners raising average selling prices fell to a net 21%, representing this year’s lowest reading for that measure. Reports of positive profit trends also improved slightly but remain negative overall.
The average rate paid on short-term loans decreased to 8.1%, reaching its lowest point since May 2023. The share of owners borrowing regularly fell to levels last seen in late 2021.
Hiring plans saw a modest uptick for the third consecutive month but remain historically low; a net seasonally adjusted 15% plan new jobs over the next three months.
Among those hiring or attempting to hire, most reported difficulty finding qualified candidates—26% saw few qualified applicants and another 17% reported none at all.
Reports indicated that supply chain disruptions are affecting fewer businesses than previously; now just over half report any impact at all.
Inflation continues to be a concern for some owners: while only about one in ten cite it as their single biggest issue, more than a quarter plan price increases in the next quarter even as recent data show a decrease in those actually raising prices.
Profit trends have shown slight improvement since July; most who saw lower profits blamed weaker sales or rising material costs, while those reporting gains credited higher sales volumes or seasonal factors.
Financing remains stable for most: only a small share reported difficulties obtaining loans or paying higher rates compared with previous attempts. Four percent identified financing and interest rates as their main business problem—unchanged from last month.
Taxation is cited by 17% of respondents as their leading concern after labor quality, followed by government regulations (9%) and competition from large businesses (5%).
Data for this report were gathered through NFIB’s regular monthly survey conducted among its members during August. The organization has collected these economic trends since the early 1970s through both quarterly and monthly surveys.
