NFIB Business Optimism Index falls to 98.7 as small business confidence slips below forecast

Small business owners just got a little less optimistic. The NFIB Small Business Optimism Index dropped to 98.7 in August, missing the consensus forecast of 99.3 and sliding from July’s reading of 99.8. That July number had been the highest since August 2025, fueled largely by improved hiring plans. One month later, the enthusiasm has cooled. What the numbers actually tell us The NFIB index has been tracking sentiment among US small business owners since 1975. It aggregates ten components covering everything from hiring expectations and capital spending plans to sales forecasts and general economic outlook. The long-term average sits around 98.0. So at 98.7, the August reading is still technically above that historical baseline. But the direction matters more than the absolute level here. The miss relative to expectations is arguably more important than the raw number. Economists had anticipated a modest dip to 99.3, essentially projecting that July’s optimism would mostly hold. Instead, the decline was roughly twice as steep as predicted. Why small business sentiment matters for the broader economy The NFIB index is particularly sensitive to a constellation of external pressures: ...