The NFIB Small Business Optimism Index declined 0.8 points to 97.9 in September 2026, slipping just below its 52-year average of 98.0, the National Federation of Independent Business reported October 13. The Uncertainty Index rose 1 point to 90, and the share of owners calling it a good time to expand fell to 7%.
Key Takeaways
- The September reading of 97.9 missed the 98.2 consensus estimate and was the lowest since June’s 97.4.
- Labor quality or availability was the top problem for the third consecutive month, cited by 26% of owners, up 3 points.
- Inflation was named the single most important problem by 20% of owners, up 4 points and far above the historical average of 7%.
- The average interest rate on short-maturity small business loans rose 0.7 points to 8.2%.
- A seasonally adjusted 32% of owners reported job openings they could not fill, 8 points above the historical average.
The Optimism Index Slips Below Its Long-Term Average
The National Federation of Independent Business, the nonprofit small business association known as NFIB, publishes the Small Business Optimism Index on the second Tuesday of each month. The index is built from 10 components covering hiring plans, capital spending, inventories, sales expectations, earnings trends, credit conditions and owners’ views on whether it is a good time to expand.
September’s 0.8-point decline follows August’s 1.1-point drop to 98.7, making it the second straight monthly decrease. Two months ago, the index sat near its highest reading in a year. It now sits one-tenth of a point under the 52-year average after two months above it.
NFIB said worsening expectations for business conditions and fewer owners reporting a good time to expand contributed most to the decline. Chief Economist Bill Dunkelberg described owners as proceeding with caution while they weigh rising costs, higher interest rates and the difficulty of finding qualified employees.
Expansion Plans And Business Outlook Weaken
The forward-looking components of the NFIB Small Business Optimism Index carried the weakest signals in September. Only 7% of owners, seasonally adjusted, said it is a good time to expand, down 5 points from August.
Expectations for better business conditions fell for a second consecutive month. A net 6% of owners expect conditions to improve over the next six months, down 4 points, though still above the historical average.
Owners also turned more cautious about their own companies. The share rating their business health as “good” fell 9 points to 48%, while the share rating it “fair” rose 7 points to 35%. That shift toward the middle suggests owners are not reporting distress so much as a loss of momentum heading into the fourth quarter.
Labor Shortages Remain The Top Problem For Small Businesses
Labor quality or availability ranked as the single most important problem for the third straight month, with 26% of owners citing it. The hiring data shows why.
A seasonally adjusted 32% of owners reported job openings they could not fill in September, down 3 points from August but still 8 points above the historical average. Of the 51% of owners hiring or trying to hire, 87% reported few or no qualified applicants. A net 17% plan to create new jobs over the next three months, unchanged from August.
The persistence of unfilled positions alongside softening expansion plans points to a structural issue rather than a demand-driven hiring push. Owners want workers to maintain current operations, not primarily to grow.
Inflation Pressure Climbs Back Up The Priority List
Inflation moved up to the second-ranked problem, with 20% of owners naming it as their top concern, up 4 points from August. That reading is nearly three times the survey’s historical average of 7%.
The timing aligns with broader price data. Consumer prices rose 3.7% year over year in September, led by a 9.1% monthly jump in gasoline, and a net 31% of NFIB respondents plan to raise their own prices, the highest share since June. For customers, that points to continued price increases at local businesses into the holiday season.
Sales concerns are also building. Eleven percent of owners named poor sales as their top problem, the third consecutive monthly increase, tying taxes for third place. Taxes fell 5 points to 11%.
Borrowing Costs Rise For Small Business Owners
Credit conditions tightened in September. A net 8% of owners reported paying a higher interest rate on their most recent loan, up 4 points and the highest level since June 2025.
The average rate on short-maturity loans rose 0.7 points to 8.2%, close to the historical average of 8.3%. With the Federal Reserve meeting October 27 and 28 and markets pricing a high probability of another rate increase, small business borrowing costs are unlikely to ease in the near term.
Inventory data reflects that caution. The net share of owners reporting inventory gains fell 4 points to negative 10%, the lowest since September 2024, even as a net 2% plan inventory investment, the highest since December 2024. Owners appear to be running lean now while preparing for future needs.
What The September Data Signals For The Fourth Quarter
Taken together, the September NFIB report shows small businesses holding steady rather than retreating. The headline index sits essentially at its long-run average, hiring plans are unchanged and few owners describe their business as poor.
The concern lies in direction. Expectations, expansion plans and sales are all weakening simultaneously while costs and borrowing rates rise. For owners and the lenders, suppliers and landlords who depend on them, the October and November readings will show whether this is a pause or the start of a longer slowdown.
FAQs
What Does NFIB Stand For?
NFIB stands for the National Federation of Independent Business, a nonprofit association representing small and independent business owners across the United States.
What Is The NFIB Small Business Optimism Index?
The NFIB Small Business Optimism Index is a monthly measure of small business sentiment based on 10 survey components, including hiring plans, capital spending, sales expectations and credit conditions. NFIB has collected the data quarterly since 1973 and monthly since 1986.
What Was The NFIB Small Business Optimism Index In September 2026?
The index was 97.9 in September 2026, down 0.8 points from August and one-tenth of a point below its 52-year average of 98.0.
What Is The NFIB Uncertainty Index?
The Uncertainty Index measures how unsure owners are about future business conditions and investment decisions. It rose to 90 in September, well above its historical average of 68.
When Is The Next NFIB Small Business Optimism Report Released?
NFIB releases the report on the second Tuesday of each month. The October 2026 report is scheduled for Tuesday, November 10, 2026.
