The NFIB Small Business Optimism Index found that small business optimism is high, with uncertainty declining in October.
The Optimism Index for October was 97.8, down 0.1 points from September and slightly below the 53-year average of 98.0. The Uncertainty Index fell 6 points from September to 84, the lowest level since December 2025.
“There was little change in optimism among small businesses in October as owners navigated enduring challenges, though there were some encouraging developments,” said NFIB Chief Economist Bill Dunkelberg in a news release. “Even with inflation pressures continuing to strain operations, more Main Street owners reported their businesses in good or excellent health, and actual sales improved. Looking ahead, continued strength in consumer spending will support economic growth, while persistent inflation, labor shortages, and policy risks will weigh on the small business outlook.”
“Minnesota small business owners are cautiously optimistic about the months ahead,” added NFIB Minnesota State Director Jon Boesche. “Improved expectations for business conditions and lower uncertainty are welcome developments, but labor shortages and rising operating expenses remain significant obstacles. Minnesota lawmakers should focus on creating an environment that allows small businesses to expand and create jobs in communities throughout the state.”
Top Small Business Issues
According to the survey, the percent of small business owners reporting the quality or availability of labor as their top operating problem decreased 1 point to 25%, making it the top reported issue for the fourth consecutive month. The current reading is 13 points above the historical average of 12%.
The second top issue in October was taxes, according to the survey, which rose notably from September. Twenty-one percent of small business owners reported taxes as their single most important problem, up 10 points from September and the highest level since May 2021.
Small business owners’ self-evaluation of the health of their business shifted positively, the survey states, with more reporting their business as excellent and good rather than fair. When asked to evaluate the overall health of their business, 15% rated it as excellent (up 2 points), 54% as good (up 6 points), 26% as fair (down 9 points) and 4% as poor (unchanged).
In October, expectations for better business conditions improved, according to the survey, after two months of deterioration. A net 8% (seasonally adjusted) of owners expect better business conditions over the next six months, up 2 points from September and still above its average.
Eleven percent (seasonally adjusted) reported that it is a good time to expand their business, up 4 points from September.
The survey stated that seasonally adjusted, 36% of all owners reported job openings they could not fill in the current period, up 4 points from September and 12 points above the historical average.
The two inventory components of the Optimism Index both downshifted, with the net percent with inventory “too low” falling 3 points to a net –3%, and planned inventory investments sliding 3 points as well to a net –1%.
Inflation pressures grew in October as both price measures increased. A seasonally adjusted net 33% of owners reported raising average selling prices (up 2 points), and a net 37% plan to increase prices, according to the survey, up 6 points from September and the highest level since July 2022.
In October, a net 13% of owners reported paying a higher interest rate on their most recent loan, according to the survey, up 5 points from September. This is the highest level since August 2024.
Hiring Activity at Small Businesses
As reported in NFIB’s monthly jobs report, hiring activity increased among small businesses, with plans to create jobs rising 1 point to 18% (seasonally adjusted) and the percent of owners reporting hiring or trying to hire in October increasing 5 points to 56%. However, 86% of those hiring reported few or no qualified applicants for the positions they were trying to fill.
In the words of NFIB member small business owners:
“Our biggest hindrance to growth is finding quality employees.” – Services, WV
“Labor and fuel costs are the issues that keep me up at night. My customers continue to demand services, but I am having trouble keeping up. I have been unable to find reliable help (employees) for the last three years. I fear for the service industries.” – Agriculture, IL
“My cost of doing business goes up, but margins stay the same or are lower.” – Services, CT
“The climate for my business in our area of operation is remaining strong. We are maintaining a competitive presence with larger companies and those of similar sizes by shopping suppliers, providing timely service, and maintaining communication with our customers.” – Construction, NC
