Small Business Optimism Slips Below Long-Run Average as Hiring Worries Persist

Small business optimism slipped below its long-run average in September, according to the National Federation of Independent Business survey released on 13 October 2026. The federation’s optimism index fell to 97.9 in September from 98.7 in August, below the 52-year historical average. An index of uncertainty among owners rose 1 point to 90, remaining 22 points above its historical average. Only 7 percent of business owners said it was a good time to expand, 5 percentage points less than in August, the federation said.

Labour quality and availability remained the most pressing problem for owners. Twenty-six percent of small business owners ranked low labour quality and availability as their single most important problem, an increase of 3 percentage points compared with August. One out of every five small businesses identified inflation as their top problem, an increase of 4 percentage points compared with August. The survey is drawn from the federation’s membership and has been collected monthly since 1986, giving a long-running read on how owners of small firms view trading conditions, hiring and investment.

Why small business optimism matters for jobs

Small firms account for a large share of private-sector employment in the United States, so their mood can shape hiring well beyond the companies themselves. When owners say it is a poor time to expand, they are less likely to open new premises, take on extra staff or buy new equipment. That caution can show up in local job markets first, in fewer openings at cafes, repair shops, builders and other small employers. The September survey suggested that many owners were holding back rather than cutting back sharply, with hiring difficulties still prominent even as expansion plans cooled.

The rise in the share of owners naming inflation as their main problem pointed to continued pressure from higher costs for materials, energy and other inputs. Owners who cannot pass those costs on to customers see margins squeezed, while those who do raise prices risk losing sales. The federation’s chief economist, Bill Dunkelberg, said owners were navigating enduring challenges. The next monthly survey, covering October, was due in November and was expected to show whether the slip in optimism was a short pause or the start of a longer period of caution among small firms.

Source: CFO Dive