The NFIB Small Business Optimism Index dipped in August to 98.7, just 1.1 points below July’s highest level since August 2025, but remaining above the 52-year average of 98.0. The Uncertainty Index fell 2 points to 89, remaining above the historical average of 68.
“Uncertainty remains elevated among small business owners as they face a mixed set of challenges with weakened sales, supply chain disruptions, and inflation pressures,” said NFIB Chief Economist Bill Dunkelberg. “While expectations for the overall economy dimmed, Main Street owners remain largely positive in the health of their own businesses.”
“Arizona’s small business owners are cautious right now,” NFIB State Director Chad Heinrich said. “Sales are down, uncertainty is up, and owners are watching the economy closely before they commit to their next hire or investment. That’s exactly why the work our legislative leaders did this year to secure tax conformity matters. It’s one less obstacle standing between a small business owner and the decision to grow.”
Reports of labor quality, availability and costs as owners’ single most important problem eased in August, with labor costs falling to their lowest level since March 2021, although labor quality and availability remain well above their long-term average. Expectations for improved business conditions declined 5 points to a seasonally adjusted net 10%, while 11% of owners rated their business’s overall health as excellent, 57% as good, 28% as fair and 3% as poor. Actual sales also weakened, with a seasonally adjusted net negative 9% reporting higher nominal sales over the previous three months, down 5 points from July and the lowest reading since November 2025. Meanwhile, inflation rose 2 points to 16%, tying taxes as the second-largest small business concern. The share of owners expecting easier credit conditions increased 2 points to a seasonally adjusted net negative 2%, its highest level since December 2024, while 62% reported experiencing some degree of supply chain disruption, down 1 point from July.
As reported in NFIB’s monthly jobs report, a seasonally adjusted 35% of all small business owners reported job openings they could not fill in August, down 1 point from July, but 11 points above the historical average. Of the 56% of owners hiring or trying to hire in August, 82% reported few or no qualified applicants for the positions they were trying to fill. A seasonally adjusted net 17% of owners plan to create new jobs in the next three months, down three points from July’s highest level since October 2022.
