US small business optimism up but uncertainty clouds outlook
The National Federation of Independent Business said on Tuesday its Small Business Optimism Index rebounded 1.7 points to 100.3 last month, with some viewing business conditions as better and reporting that it is a good time to expand.
However, the survey's uncertainty index jumped eight points to 97, which the NFIB said was "clouding decisions about hiring, pricing, investment in plant and equipment."
It attributed the rising uncertainty to "tariffs, inflation and international conflict such as in Gaza."
President Donald Trump's protectionist trade policy, marked by stiff import duties, has been blamed by economists for clouding the economic outlook. The duties have raised costs for businesses and consumers.
That was evident in the NFIB survey, with one owner in the fabricated metal product manufacturing industry saying "increased costs are affecting everyone. I believe things will improve, but it will take time – six to 12 months. I just hope small businesses can hold on that long."
One respondent in the agriculture sector reported that "corn and soybean prices are too low," adding that "I usually contract 50% or more ahead, but prices have not been at profitable levels therefore I have contracted next to nothing."
The NFIB survey showed the share of owners reporting poor sales as their top business issue climbed last month to the highest level since February 2021.
Twenty-one percent of small business owners reported labor quality as their single most important problem, up five points from June and ranking as the top problem. The Trump administration is rounding up undocumented immigrants for deportation, resulting in a reduction of the labor pool.
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