US Small Business Optimism Hits Highest Level Since August 2025

Key Facts

In a move reflecting the resilience of the US economy against inflationary pressures, latest data shows a significant strengthening in small business sentiment. The NFIB Small Business Optimism Index rose to 99.8 in July, significantly beating the consensus forecast of 97.5 and the previous reading of 97.4. This level marks the highest point for the index since August 2025, signaling improved business conditions and a more positive outlook for the small business sector.

According to reports, the increase was broad-based, with eight of the index's ten components improving. A key driver was the rebound in hiring plans following four consecutive months of decline, alongside an improvement in capital expenditure intentions. This suggests a greater willingness among business owners to commit resources to expansion and equipment. However, uncertainty remains elevated, with the Uncertainty Index hitting 91 points, well above its historical average of 68, as businesses continue to face labor shortages.

Looking at recent economic data, this boost in optimism coincides with a slight cooling in JOLTs Job Openings, which fell to 7.359 million as of August 4, 2026, from a previous 7.537 million per market data. Investors are now watching how small business strength impacts Unit Labour Costs, which grew by 1.3% in the most recent quarterly data, to gauge the broader trajectory of economic growth and monetary policy.