Small-business owners reported feeling more optimistic last month, as confidence in future sales picked up and bottom lines improved — though persistent hiring challenges and muted investment continued to weigh on sentiment.
The National Federation of Independent Business (NFIB) said Tuesday its monthly optimism index rose to 100.8 , up half a point from July. That’s above the 50-year average and a sign that small companies are feeling more stable than they did earlier in the year.
Expectations for sales improved sharply from the month before , with a net 12% of owners predicting higher volumes over the next three months, the survey found. That was the main driver behind the rise in optimism.
And more than two-thirds of those surveyed described their business as in good or excellent health, an improvement from July.
“Optimism increased slightly in August with more owners reporting stronger sales expectations and improved earnings,” said Bill Dunkelberg, NFIB’s chief economist. “Labor quality, however, remains the top issue on Main Street.”
Hiring remains difficult. About one in three small businesses pointed to job openings they couldn’t fill — the lowest share in five years, but still high by historical standards.
Companies in construction and manufacturing reported the most trouble finding skilled workers. More than half of owners trying to hire said they received few or no qualified applicants.
Prices are also showing signs of easing. Only 21% of owners said they raised prices in August, the lowest level this year. Plans for future price increases also declined, a sign that some inflation pressures may be cooling.
At the same time, borrowing costs improved slightly, with interest rates on short-term loans dipping to their lowest since mid-2023.
Uncertainty among small firms also eased, with NFIB’s gauge slipping to 93 in August. That’s still among the highest readings in the survey’s five-decade history.
Even with new federal tax breaks aimed at spurring investment, only about one in five owners plan major purchases such as equipment or property in the next six months — a slight drop from July.
The tax breaks, part of President Trump’s recently signed “One Big Beautiful Bill,” include permanent small-business deductions and expanded write-offs for equipment and investment, aimed at encouraging firms to spend more.
It comes after shipments to the U.S. plunged as the Trump administration ended a tariff exemption for low-value packages, a move that added new costs for many small businesses.
Still, business owners remain cautious. Just over one-third expect overall conditions to improve in the months ahead, and only 14% said now is a good time to expand.
—Hannah Parker contributed to this article.
