The National Federation of Independent Business (NFIB) Small Business Optimism Index fell 0.5 points in February to 98.8. The Uncertainty Index decreased three points from January to 88.
“Although optimism declined slightly, small businesses report feeling more certain in February as they look toward the coming months,” said Bill Dunkelberg, chief economist for NFIB. “High sales and increased profits made February a more positive month for many owners, but competition from large businesses is putting stress on Main Street firms as they navigate the current economic climate.”
Key findings include:
- The Employment Index ticked up nearly a point in February to 103.5, 3.5 points above its historical average of 100 and 2.3 points above its 2025 average. This gain was driven primarily by its compensation-related components rather than employee-count related ones.
- Fifteen percent of small business owners cited labor quality as their single most important problem, down 1 point from January and the fourth consecutive monthly decline. The last time labor quality, reported as the top issue, was this low was in April 2020.
- A net 1 percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up 7 points from January.
- In February, 59 percent of small business owners reported that supply chain disruptions affected their business to some extent, a decrease of 3 points from January.
- The net percent of owners raising average selling prices fell 2 points from January to a net 24 percent (seasonally adjusted).
- Seasonally adjusted, a net 34 percent reported raising compensation, up 2 points from January and the highest level since March 2025.
- When asked to evaluate the overall health of their business, 12 percent rated it as excellent (down 2 points), 55 percent as good (up 1 point), 26 percent as fair (down 1 point), and 5 percent as poor (up 1 point).
A seasonally adjusted 33 percent of all small business owners reported job openings they could not fill in February, up 2 points from January. Of the 54 percent of owners hiring or trying to hire in Month, 85 percent reported few or no qualified applicants for the positions they were trying to fill.
Twelve percent of owners reported that inflation was their single most important problem in operating their business, unchanged from January and ranking as the third top issue.