Small business sentiment experienced a slight downturn in September, dipping below its 52-year average for the first time since June, according to the National Federation of Independent Business (NFIB) survey released on October 13, 2026. The NFIB Small Business Optimism Index decreased by 0.8 points to 97.9, falling just short of the 52-year average of 98.0.
Growing Uncertainty and Fading Optimism
The Uncertainty Index rose by 1 point to 90, significantly exceeding its historical average of 68. This increase reflects a growing sense of pessimism among business owners regarding future economic conditions. Expectations for better business conditions worsened for the second consecutive month. More owners rated the current health of their small business as only 'fair' rather than 'good,' indicating a less optimistic assessment of their economic circumstances.
Top Concerns: Labor and Inflation
Labor quality or availability remained the most significant issue for small businesses for the third month in a row, with 26% of owners reporting it as their single most important problem. This was followed by inflation, cited by 20% of owners as their top concern, an increase of 4 points from August. Approximately 32% of small business owners reported job openings they could not fill, and among those actively hiring, 87% stated they had few or no qualified applicants.
Expansion Plans Slowed
Expansion plans also saw a decrease, with only 7% of owners indicating that now is a good time to expand, a five-point drop from August. This cautious approach is attributed to challenges such as rising costs, higher borrowing expenses, and persistent hiring difficulties. Despite these pressures, Holly Wade, NFIB’s executive director of research, noted that small business optimism is currently in an “OK place,” with consumers still spending and businesses still investing, though challenges are increasing operational stress.
Price Increases on the Horizon
In response to rising costs, a net 31 percent of small business owners plan to raise prices in the next three months, up from 28 percent in August. This trend is prompting businesses to develop strategies for managing customer reactions to potential price adjustments.
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