The NFIB Small Business Optimism Index eased to 98.7 in August 2026, according to a survey released on 8 September by the National Federation of Independent Business, down 1.1 points from July’s reading, which had been the highest since August 2025. The index nonetheless remained above its 52-year average of 98.0.
What’s Weighing on Owners
Labour quality remained the top concern cited by small business owners, named by 23% of respondents, according to NFIB, while the share citing inflation as their single biggest problem rose two points to 16%. The survey’s Uncertainty Index fell two points to 89 but stayed well above its historical average of 68, and the Employment Index slipped to 101.8 from 102.1 in July. NFIB’s chief economist said the readings pointed to an economy where small firms are managing rather than retreating, even as several individual components of the index softened.
A Mixed Picture on Main Street
NFIB said owners faced a mixed set of challenges, including weakened sales and supply-chain disruptions alongside inflation pressures, even as many remained positive about the health of their own individual businesses. The combination of elevated uncertainty and softer sales suggests small firms are being more cautious about near-term spending and hiring plans than the headline index alone might suggest. Owners in sectors most exposed to imported materials and components have also had to contend with the knock-on effects of tariff and supply-chain disruptions cited elsewhere in the survey.
Why It Matters
Small businesses employ roughly half of the US private-sector workforce, making their confidence levels a closely watched barometer of broader economic health. A dip in optimism alongside persistently high uncertainty points to continued caution among Main Street employers even as the overall index remains above its long-run average, a distinction that matters for how policymakers read the strength of the wider economy and for the pace of hiring in the months ahead.
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