US NFIB Business Optimism Index Actual 98.8 (Forecast 96, Previous 95.80)

US NFIB Business Optimism Index Actual 98.8 (Forecast 96, Previous 95.80)

Despite the ongoing tariff chaos and political uncertainty, small business owners in the United States are expressing increased optimism, according to the latest Small Business Optimism Index from the National Federation of Independent Business (NFIB). The index, which surveys over 5,000 small business owners, showed a significant rise in optimism for May 2025, with the headline number reaching 98.8. This marks the first month-over-month increase since December and is slightly above the 51-year average of 98 [1].

The uptick in optimism is driven primarily by expectations for better business conditions and stronger sales. The recent rebound in the stock market, with the S&P 500 Index gaining over 6% in May, has likely contributed to this positive sentiment [1]. However, small business owners remain cautious, with taxes now topping the list of concerns, cited by 18% of respondents. This is the first time taxes have been the leading concern since December 2020, replacing labor quality, which has fallen to second place [1].

Inflation remains a significant worry for many small business owners, with 14% listing it as their biggest problem. Despite a recent slowdown in consumer price increases, the concern over inflation persists [1]. Other concerns include financing costs, government regulation, and insurance availability, which are trailing far behind in terms of reported issues.

The NFIB survey also highlights a mixed picture regarding business planning. While plans to increase capital outlays rose to their highest level this year, actual earnings are reported to be falling. Fewer owners reported raising compensation last month, indicating that wage pressures are easing. However, job creation plans remain weak, reflecting the ongoing labor market challenges [1].

The high level of uncertainty, with the NFIB’s Uncertainty Index remaining above 90 since July 2024, continues to pose a significant challenge for small business owners. This uncertainty is driven by the shifting tariff policies and the ongoing debate over the "One Big Beautiful Bill" in the Senate [1].

Overall, the NFIB survey reflects an economy that is growing slowly and a labor market that, while resilient, is softening. The optimism among small business owners, while encouraging, is tempered by the ongoing uncertainty and the need for clear policy direction.

References:
[1] https://www.forbes.com/sites/brandonkochkodin/2025/06/10/small-business-optimism-rises-in-may-despite-tariff-chaos/