Small Business Optimism Inched Down 0.5 Points in February

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Small Business Optimism Inched Down 0.5 Points in February

Washington, DC, March 10, 2026-The NFIB Small Business Optimism Index fell 0.5 points in February to 98.8 but remained slightly above the 52-year average of 98. 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 NFIB chief economist Bill Dunkelberg. “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.”

In conjunction with the February report, NFIB also released a new episode of the NFIB Research Center’s “Small Business by the Numbers” podcast. Listen to the latest episode here.

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 one 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% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up seven points from January. The percent reporting actual sales gains are now close to the historical average of a net 0%. The last time actual sales were this high was in May 2022.
  • The net percent of owners expecting higher real sales volumes fell eight points from January to a net 8% (seasonally adjusted). This more than erased the strong, six-point gain observed in January.
  • In February, 59% of small business owners reported that supply chain disruptions affected their business to some extent, a decrease of three points from January.
  • The net percent of owners raising average selling prices fell two points from January to a net 24% (seasonally adjusted). This marked the third consecutive month that actual price increases slowed, though the changes remain well above the historical average.
  • Seasonally adjusted, a net 34% reported raising compensation, up two points from January and the highest level since March 2025.
  • The frequency of reports of positive profit trends rose 7 points from January to a net negative 14% (seasonally adjusted). The last time earnings trends were this high was in December 2021.
  • When asked to evaluate the overall health of their business, 12% rated it as excellent (down two points), 55% as good (up one point), 26% as fair (down one point), and 5% as poor (up one point).
  • Eight percent reported competition from large businesses as their single most important problem, up two points from January. The last time competition from large businesses, reported as the top issue, was this high was in May 2021.