NFIB Business Optimism Index

The NFIB Small Business Optimism Index measures sentiment among United States small and independent owners, not actual output or spending. It comes from the National Federation of Independent Business (a private small business association) via its research arm and monthly Small Business Economic Trends survey. It began quarterly in the fourth quarter of 1973 and monthly in 1986, using random draws from NFIB membership files by mail plus 1 reminder.

Usable replies run from a few hundred to about 1700, with no state or regional split and no coverage of large firms or consumers. A companion Uncertainty Index sums "Don't Know" and "Uncertain" answers across 6 questions against an average of 68.

Responses are collected during the reference month by mailed questionnaire plus 1 reminder, and the data cover the prior month. The report appears on the 2nd Tuesday of each month, a timing rule stated by the publisher, with calendars listing 6:00 AM ET.

Each release prints the headline index, the Uncertainty Index (a gauge of unsure answers), and the 10 component table. Sections cover labor, spending, inventories, sales, credit, and inflation. It also gives the outlook, the single most important problem, member quotes, history tables, the full questionnaire, and the companion jobs report.

The publisher states no revision rule, and calendars record no revisions. Readers compare each reading with the long-run average of 98 plus the direction and the count of rising components.

The headline blends plans, expectations, and current conditions, with expectations often moving it most.

• Expectations (Expect Economy to Improve; Expect Real Sales Higher): net shares expecting better conditions in 6 months and higher real sales in 3 months.
• Hiring (Plans to Increase Employment; Current Job Openings): net share planning more jobs in 3 months and share with posts they cannot fill.
• Spending and stocks (Plans to Make Capital Outlays; Plans to Increase Inventories): shares planning capital spending and larger stocks in 3 to 6 months.
• Expansion and credit (Now a Good Time to Expand; Expected Credit Conditions): share seeing the next 3 months as a good time to expand. Net share expecting easier credit in the next 3 months.
• Inventory satisfaction (Current Inventory): net share saying stocks are too low minus too large.
• Earnings Trends: net share reporting higher minus lower earnings over the past 3 months, the lone backward looking gauge.

In the November 2024 survey, the index rose 8.0 points to 101.7, its highest since June 2021 and its largest monthly gain on record. That ended 34 straight months below the 50-year average of 98, with 9 of 10 components up, none down, and 1 flat. The push came from outlook: net share seeing a better economy jumped 41 points to a net 36%, best since June 2020.

In December 2024 the gauge rose to 105.1, its highest since October 2018, per the January 14, 2025 release. Expected better conditions rose 16 points to a net 52%, best since the fourth quarter of 1983. Only 36% had posts they could not fill, inflation stayed the top problem at 20%, and unsure answers fell 12 points after a record 110.

1. Sample: NFIB draws owners at random from its membership files and mails each a questionnaire plus 1 reminder, collecting replies during the reference month.
2. Net %: per question, subtract the unfavourable share from the favourable share; 30% saying higher minus 18% saying lower gives net 12%. Current Job Openings and Now a Good Time to Expand use straight shares, not nets.
3. Seasonal adjustment: each of the 10 series is corrected for normal seasonal swings, though NFIB names no adjustment method.
4. Composite index: the 10 adjusted series are combined into 1 index scaled so average conditions in 1986 equal 100, with no disclosed weights or formula. A reading of 105 thus sits 5% above the 1986 base, while 98 marks about the long-run mean.