US Small Business Confidence Reaches 11-Month High as Hiring Plans Surge

11 August 2026

Confidence among U.S. small business owners climbed to an 11-month high in July, offering an encouraging signal for the economy even as employers reported growing difficulty finding enough workers to fill open positions.

The National Federation of Independent Business said its Small Business Optimism Index increased 2.4 points to 99.8 in July, its highest level since August 2025. The reading also moved above the index's 52-year average of 98, reflecting a notable improvement in sentiment among smaller companies across the country. Much of that optimism came from stronger hiring intentions. The NFIB's employment index rebounded after four consecutive months of declines, rising 1.9 points to 102.1.

Even more significantly, 20 percent of small business owners said they planned to create new jobs during the next three months. That figure jumped nine percentage points from June and represented the strongest hiring intentions recorded since October 2022.

The improvement offers a potentially reassuring counterpoint to recent government employment figures. The United States unexpectedly lost 23,000 nonfarm jobs in July, while employment gains for May and June were revised substantially lower. The new NFIB survey suggests that weakness may not necessarily signal a prolonged collapse in hiring. However, businesses interested in expanding their workforces are confronting a significant obstacle: finding available employees.

The share of small business owners reporting job openings they could not fill increased four percentage points to 36 percent in July, the highest level since June 2025. The shortages were not limited to specialized positions, with businesses struggling to find both skilled and unskilled workers.

Labor quality or availability was identified as the single most important problem by 27 percent of business owners surveyed. That figure stands well above the historical average of 12 percent, demonstrating how dramatically workforce concerns have risen. Industries including construction and agriculture have been particularly affected, with employers reporting difficulty attracting qualified workers.

The shrinking labor pool is becoming an increasingly important factor in the broader U.S. employment picture. The American labor force has declined by more than one million people this year, influenced by retirements and the Trump administration's intensified immigration enforcement policies. Hundreds of thousands of immigrants have also lost protected status, potentially reducing worker availability further. At the same time, inflation appears to be becoming less of an immediate concern for small companies.

Only 14 percent of owners identified inflation as their biggest problem in July, a seven-point decline from June and the first decrease in that measure this year. The shift suggests that labor availability is increasingly replacing price pressures as the most pressing challenge facing many smaller employers. Despite stronger overall confidence, uncertainty remains elevated.

The NFIB's uncertainty index rose two points to 91 as more business owners expressed hesitation about whether conditions were favorable for expansion and capital investment. Continuing geopolitical tensions involving Iran were cited as one possible reason for that caution.

The latest survey therefore paints a complicated but generally improving picture of America's small business economy. Owners are increasingly confident and many are ready to hire, but finding enough workers to support that expansion is becoming considerably harder.

If those labor shortages persist, the biggest challenge for small businesses may no longer be whether they want to grow. It may simply be whether they can find enough people to make that growth possible.