Small business optimism in the United States increased slightly at the end of 2025, according to the latest National Federation of Independent Business (NFIB) Small Business Optimism Index. The index rose by 0.5 points in December to reach 99.5, staying above its 52-year average of 98. This increase was largely driven by a greater number of small business owners expecting better economic conditions.
Michael Iosua, state director for NFIB in Hawaii, commented on the report: “It was good to see the last Small Business Optimism Index of 2025 end on a somewhat positive note. Not too far back in the minds of Main Street business owners was the relief they felt about the 20% Small Business Deduction being made permanent instead of being allowed to expire at the end of last month.”
Bill Dunkelberg, NFIB Chief Economist, said: “2025 ended with a further increase in small business optimism. While Main Street business owners remain concerned about taxes, they anticipate favorable economic conditions in 2026 due to waning cost pressures, easing labor challenges, and an increase in capital investments.”
The December report also highlighted that the net percentage of owners expecting better business conditions increased by nine points from November to a net 24 percent after seasonal adjustment—the first such rise since July. In terms of how small businesses evaluated their overall health, nine percent rated it excellent (down two points), fifty-four percent rated it good (up one point), thirty-four percent rated it fair (up four points), and three percent rated it poor (down two points). Taxes emerged as a significant concern; twenty percent identified taxes as their most important problem—an increase of six points from November and marking the highest level since May 2021.
The Uncertainty Index dropped seven points from November to eighty-four, which is its lowest reading since June 2024.
Alongside this report, NFIB introduced a new episode of its podcast “Small Business by the Numbers,” featuring Holly Wade and Peter Hansen discussing data and trends affecting small businesses nationwide.
The monthly NFIB Small Business Optimism Index is widely regarded as an important measure for understanding America’s small business economy and is used by policymakers including the Federal Reserve and Congressional leaders. The index provides a national snapshot but does not break down results by state.
NFIB has represented small and independent businesses across all sectors for over eighty years through advocacy at both federal and state levels.
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