Small Business Optimism Declined 2.1 Points to 100.7 in February

Washington, DC, March 11, 2025-The NFIB Small Business Optimism Index fell by 2.1 points in February to 100.7. This is the fourth consecutive month above the 51-year average of 98 and is 4.4 points below its most recent peak of 105.1 in December. The Uncertainty Index rose four points to 104 – the second highest recorded reading.

“Uncertainty is high and rising on Main Street, and for many reasons,” said NFIB chief economist Bill Dunkelberg. “Those small business owners expecting better business conditions in the next six months dropped and the percent viewing the current period as a good time to expand fell, but remains well above where it was in the fall. Inflation remains a major problem, ranked second behind the top problem, labor quality.”

Key findings include:

* The net percent of owners expecting the economy to improve fell ten points from January to a net 37% (seasonally adjusted).

* Twelve percent (seasonally adjusted) of owners reported that it is a good time to expand their business, down five points from January. This is the largest monthly decrease since April 2020.

* Sixteen percent of owners reported that inflation was their single most important problem in operating their business, down two points from January and now just below labor quality as the top issue. The last time it was this low was in October 2021.

* The net percent of owners raising average selling prices rose 10 points from January to a net 32% (seasonally adjusted). This is the largest monthly increase since April 2021, and the third highest in the survey’s history. The percent of owners lowering their prices is 10 points lower than it was one year ago.

* Seasonally adjusted, a net 29% plan price hikes in the next three months, up three points from January and the highest reading in 11 months.

* Labor costs reported as the single most important problem for business owners rose three points to 12%, only one point below the survey’s highest reading of 13% reached in December 2021. The last time labor costs ranked this high was in February 2023.

* The frequency of reports of positive profit trends was a net negative 24% (seasonally adjusted), up one point from January.

* A net 2% of owners reported that their last loan was harder to get than in previous attempts (down one point). The last time this reading was this low was in February 2022.

* Twenty-four percent of all owners reported borrowing on a regular basis, down three points from January and the lowest since May 2022.