NFIB Small Business Optimism Index Slips to 98.7 in August
Main Street lost a little of its nerve last month, according to the NFIB Small Business Optimism Index published September 8. The August reading came in at 98.7, down 1.1 points from July, yet still above the 52-year average of 98.0.
That half-good, half-uneasy shape probably matches how your own month felt. The headline barely moved, so the useful information sits in the components underneath it, and a few of them changed in ways worth acting on.
What the August Reading Actually Says
July had been the strongest month since August 2025, so a small step back was hardly a collapse. The index remains in the range that usually signals steady rather than fragile conditions.
Uncertainty also eased slightly. The Uncertainty Index dropped 2 points to 89, although that still sits far above its long-run mark of 68, which tells you owners are planning without much confidence in the next two quarters.
Expectations did the real damage. The share of owners anticipating better conditions ahead gave up 5 points and settled at a net 10%, and while that clears its net 4% norm, the direction is the part that matters.
| Measure | August reading | Change from July |
|---|---|---|
| Optimism Index | 98.7 | Down 1.1 points |
| Uncertainty Index | 89 | Down 2 points |
| Expect better conditions | Net 10% | Down 5 points |
| Higher nominal sales, past 3 months | Net negative 9% | Down 5 points |
| Plan to create new jobs | Net 17% | Down 3 points |
Sales Are the Number That Should Worry You
Here is the figure that deserves your attention. On a seasonally adjusted basis, the net share of owners seeing stronger nominal revenue sat at negative 9%, five points beneath the July figure, and no month since November 2025 has read worse.
Negative sales readings are not unusual on their own. A five-point slide inside a single month is different, because it suggests demand softened rather than simply flattened.
Inflation crept back into the conversation too. Sixteen percent of owners named it their single most important problem, up 2 points, which puts it level with taxes as the second-ranked issue on Main Street.
Labor Costs Eased While Finding People Did Not
There is genuine relief in this report, and it sits in the labor data. Labor costs registered as the single biggest headache less often than in any month since March 2021.
Availability is another story. Thirty-five percent of owners still had vacancies they could not staff, down a single point but 11 points clear of the historical norm, and among the 56% who were hiring or trying to hire, 82% saw few or no qualified applicants.
Hiring plans cooled in step. A net 17% of owners expect to add jobs over the next quarter, down 3 points from July, which echoes the softer pace showing up in small business hiring data from payroll providers.
A Practical Plan for the Next Sixty Days
Weak sales and stubborn hiring costs pull in opposite directions, so pick your battles deliberately. Start by pressure-testing revenue rather than trimming everywhere at once.
- Rerun your quarterly forecast using August actuals, not July optimism.
- Identify your two highest-margin offers and put your marketing hours there.
- Confirm your credit line terms now, because a net negative 2% expecting easier credit is still the best reading since December 2024.
- Keep one open role live even if you pause the rest, since qualified applicants remain scarce.
Supply chains deserve a second look as well. Sixty-two percent still reported some level of disruption reaching their operations, essentially flat against July, so single-supplier exposure remains a live risk.
Borrowing costs shape most of these decisions. Check current benchmark rates against your existing terms using the Federal Reserve H.15 selected interest rates release before you commit to new debt, and read it alongside our coverage of small business loan rates.
Owner Questions About a Softer Month
Is 98.7 a bad number?
No. It clears the 52-year benchmark of 98.0, so conditions read as ordinary rather than distressed.
Why did expectations fall while owners still rated their own businesses well?
Owners separated the economy from their own books. Fifty-seven percent called their business health good and 11% called it excellent, even as views on the wider economy dimmed.
When does the next report land?
NFIB puts the index out each month on the second Tuesday, so October brings the September survey.
The Signals Worth Tracking Into October
Watch whether the sales reading recovers. One weak month is noise, and a second consecutive decline would turn this into a demand story rather than a sentiment story.
Consumer behavior is the leading edge of that. Our reading of the latest consumer confidence report found the same split showing up here, with people feeling fine about today and worse about next year.
Running a company through a month like August is tiring, and second-guessing every decision makes it heavier than it needs to be. The data supports a calmer read: demand softened, labor costs finally gave you a break, and the owners who plan around both will be the ones with room to move in January.
