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US: NFIB Small Business Optimism Index
| Consensus | Consensus Range | Actual | Previous | |
| Index | 97.3 | 96.8 to 98.5 | 99.8 | 97.4 |
Highlights
Small business sentiment tops expectations at 99.8 in July from 97.4 in June and just below 100.3 in July 2025. The index tops its 52-year average of 98 for the first time in five months.
Interestingly, the biggest improvement in the index components is in plans to increase employment with 20 percent of firms saying they will add jobs. Capex plans also improve. The sour note is profits expectations which are suffering from rising input costs.
An altogether impressive reading, which suggests small business owners expect conditions to continue to improve even as uncertainty remains high. It calls to mind Cleveland Fed President Beth Hammack comment on Monday: she said businesses in her district are not feeling constrained in a meaningful way by the current level of interest rates.
Market Consensus Before Announcement
The consensus sees sentiment a bit weaker at 97.2 in July versus 97.4 in June.
Definition
The small business optimism index is compiled from a survey that is conducted each month by the National Federation of Independent Business (NFIB) of its members. The index is a composite of 10 seasonally adjusted components based on the following questions: plans to increase employment, plans to make capital outlays, plans to increase inventories, expect economy to improve, expect real sales higher, current inventory, current job openings, expected credit conditions, now a good time to expand, and earnings trend.
Description
Small businesses are responsible for a majority of new job creation and the NFIB focuses on this sector of the economy. The direction of the health of small businesses can portend changes in the stock market - especially small caps.
