- US NFIB 99.5 vs 99.2 expected
- Prior 99.0
- Full report here
The NFIB Small Business Optimism Index rose 0.5 points in December to 99.5 and remained above its 52-year average of 98, as reported by the agency. The Uncertainty Index fell 7 points from November to 84, the lowest reading since June 2024.
NFIB Chief Economist Bill Dunkelberg said: “2025 ended with a further increase in small business optimism. While Main Street business owners remain concerned about taxes, they anticipate favorable economic conditions in 2026 due to waning cost pressures, easing labor challenges, and an increase in capital investments.”
Small business optimism rose to the highest level since 2020 in December 2024 but tumbled in the first half of 2025 due to Trump’s trade war. As Trump folded on aggressive tariffs and started lowering them to more reasonable levels, small business optimism picked up and continues to do so helped by improving economic conditions and Fed’s rate cuts.
What is the US NFIB Small Business Optimism Index?
The NFIB Small Business Optimism Index is a monthly economic indicator that measures the health of the U.S. economy from the perspective of small business owners. It is produced by the National Federation of Independent Business (NFIB), the largest small-business advocacy group in the country.
Because small businesses employ nearly 50% of the private workforce and contribute significantly to GDP, this index is considered a leading indicator. It can signal shifts in the economy before they show up in broader government data.
While it is sometimes called a “tier-2” or “tier-3” indicator (meaning it moves the market less than the NFP or CPI), it offers unique insights that others miss:
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Hiring Predictor: The “Plans to Increase Employment” component is a highly accurate preview of the Non-Farm Payroll (NFP) report.
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Inflation Warning: The survey tracks how many owners are planning to raise prices, which often predicts future CPI spikes.
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The “Main Street” vs. “Wall Street” Gap: Sometimes the stock market is booming while small businesses are struggling with credit and costs; this index highlights that disconnect.
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Political Sensitivity: Small business owners are highly sensitive to changes in tax law and regulation, making the index a mirror for how the business community views current government policy.
This article was written by Giuseppe Dellamotta at investinglive.com.