Due to expectations for better business conditions and sales improvements, the NFIB Small Business Optimism Index rose 2.1 points in June to 97.4, nearing its 52-year average of 98.0. The Uncertainty Index fell 2 points from May to 89, remaining well above its historical average of 68.
As reported in NFIB’s monthly Jobs Report, the NFIB Small Business Employment Index remained essentially flat, registering 100.2 in June. A seasonally adjusted 32% of small business owners reported job openings they could not fill in June, up 3 points from May’s lowest level since May 2020.
“Current economic conditions present small business owners with both encouraging developments and ongoing challenges,” said NFIB Chief Economist Bill Dunkelberg in a news release. “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.”
“It is encouraging to see optimism rebounding and small businesses planning growth and investments,” added NFIB Minnesota State Director Jon Boesche. “However, Minnesota employers are still navigating a challenging hiring environment and unnecessary regulations like the Paid Family & Medical Leave mandate. The Uncertainty Index sitting well above the historical average means small business owners remain cautious with their expansion plans.”
Main Street Makes a Rebound
Job openings and hiring plans rebounded in June, according to the NFIB report. Thirty-two percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period (up 3 points), and a seasonally adjusted net 11% of owners plan to create new jobs in the next three months (up 2 points). The improvement can be seen as a correction from May’s decline.
The report also cited that 21% of business owners noted inflation as their single most important business problem, up 3 points from May and marking the highest reading since October 2024. Inflation ranks as the top problem.
The net percent of owners raising average selling prices rose 2 points from May to a net 38% (seasonally adjusted), according to the report. This is the fourth consecutive month that actual price increases have risen, marking the highest level since January 2023.
There was good news on the forward-looking inflation metric in the report, as the share of owners planning to raise prices in the near future declined. Looking forward to the next three months, a net 32% (seasonally adjusted) plan to increase prices, down 2 points from May’s highest reading since July 2022.
Small Business Optimism on the Horizon
According to NFIB’s report, the net percent of owners expecting better business conditions in the next six months rose 10 points in June to a net 13% (seasonally adjusted), improving for the first time this year.
The net percent of owners expecting higher real sales volumes over the next quarter rose 8 points from May to a net 9% (seasonally adjusted).
Twenty percent (seasonally adjusted) of small business owners plan to make capital outlays in the next six months, according to the report, up 4 points from May and the highest reading of the year.
A net 0% (seasonally adjusted) of owners viewed current inventory stocks as “too low” in June up 4 points from May and marking the highest level since May 2025.
The report found that the average interest rate paid on short-maturity loans was 7.4% in June, down 0.4 points from May and the lowest level since October 2022. Twenty-two percent of all owners reported borrowing regularly, down 5 points from May. June’s reading is 12 points below the historical average of 34%
