Main Street’s mood cooled a little in August. The National Federation of Independent Business (NFIB) said on Sept. 8 that its Small Business Optimism Index fell 1.1 points from July to 98.7. That’s still slightly above the index’s 52-year average of 98.
Uncertainty eased, but stays high
NFIB’s Uncertainty Index dropped two points to 89. That’s well above its historical average of 68, a sign that many owners still find it hard to predict where business conditions are heading.
“Uncertainty remains elevated among small business owners as they face a mixed set of challenges with weakened sales, supply chain disruptions, and inflation pressures,” NFIB Chief Economist Bill Dunkelberg said in the release.
Sales were the weak spot
The sales numbers explain much of the dip:
- A seasonally adjusted net 10% of owners expect higher real sales, down five points from July.
- The net percent reporting higher sales over the past three months fell five points to negative 9%, the lowest reading since November 2025.
- 62% of owners said supply chain disruptions were affecting their business.
Hiring plans picked up
On the jobs side, the picture was firmer. A seasonally adjusted net 17% of owners plan to create new jobs in the next three months, up three points. Thirty-five percent reported job openings they couldn’t fill, down one point. Among owners hiring or trying to hire, 82% said they found few or no qualified applicants.
What’s keeping owners up at night
Labor quality remained a top concern, although NFIB said reports of it as the single most important problem eased in August while staying far above the long-term average. Labor costs were cited by 16% of owners, the lowest share since March 2021. Inflation and taxes were tied at 16% each, with inflation up two points.
Most owners still rate their own businesses as healthy. Fifty-seven percent described their business as in good health and 11% as excellent, while 28% said fair and 3% said poor.
Why it matters
The NFIB index is one of the longest-running monthly reads on small business sentiment, and owners’ sales expectations often feed into hiring and spending decisions. August’s report suggests a cautious but not gloomy mood heading into the fourth quarter, a period that matters a lot for retailers and other seasonal businesses.