Small business optimism in the United States showed improvement in July, according to new data from the National Federation of Independent Business (NFIB). The organization’s monthly Small Business Optimism Index increased by 1.7 points to reach 100.3, slightly above its long-term average of 98.
The rise was driven largely by small business owners reporting better conditions and an increased sense that it is a good time to expand their operations. “Optimism rose slightly in July with owners reporting more positive expectations on business conditions and expansion opportunities,” said NFIB Chief Economist Bill Dunkelberg. “While uncertainty is still high, the next six months will hopefully offer business owners more clarity, especially as owners see the results of Congress making the 20% Small Business Deduction permanent and the final shape of trade policy. Meanwhile, labor quality has become the top issue on Main Street again.”
The NFIB Small Business Optimism Index is widely regarded as a key measure of small business sentiment in America and is used by policymakers including the Federal Reserve and Congressional leaders. According to NFIB, its members typically employ between one and nine people and report gross sales averaging about $500,000 annually.
In July’s survey results, 13% of respondents rated their overall business health as excellent—an increase of five percentage points—while 52% reported good health for their businesses, up three points from June. Those describing their situation as fair dropped four points to 31%, while those rating it poor declined three points to 4%.
However, challenges remain for many small businesses. The proportion citing poor sales as their main problem rose one point to 11%, marking the highest level since February 2021. Expectations for improved business conditions were notably higher: a net 36% expected better conditions over the next six months—a jump of 14 points from June and above historical averages.
Additionally, more small business owners are considering expansion; seasonally adjusted figures show that 16% believe now is a good time to expand operations, up five percentage points from June.
NFIB continues its advocacy work on behalf of small businesses nationwide through research and engagement at both state and federal levels.
For ongoing updates about Oregon’s small business environment, visit www.nfib.com or follow @NFIB_OR on X.
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“Optimism rose slightly in July with owners reporting more positive expectations on business conditions and expansion opportunities,” said NFIB Chief Economist Bill Dunkelberg. “While uncertainty is still high, the next six months will hopefully offer business owners more clarity, especially as owners see the results of Congress making the 20% Small Business Deduction permanent and the final shape of trade policy. Meanwhile, labor quality has become the top issue on Main Street again.”
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For over eight decades since its founding in 1943, NFIB has represented America’s independent businesses across all states through advocacy efforts focused solely on supporting smaller enterprises.
