Uncertainty among U.S. small business owners surged in January, even as overall optimism remained above historical averages, according to the latest survey from the National Federation of Independent Business (NFIB).
The NFIB’s uncertainty index jumped 14 points to 100, one of its highest recorded levels. Meanwhile, the Small Business Optimism Index declined slightly to 102.8, falling 2.3 points from December but still surpassing its 51-year average of 98.
Despite the dip in optimism, nearly half of small business owners remained hopeful about future economic conditions, though the share dropped five points from the previous month. Additionally, 17% of respondents considered it a good time to expand their businesses significantly.
Labor market challenges remained a major concern. Over one-third of small business owners struggled to fill job openings, and among those hiring, 90% reported difficulties finding qualified candidates. Labor quality and inflation tied as the most pressing issues for businesses, each cited by 18% of respondents.
Capital investment plans also showed signs of caution, with only 22% of small business owners intending to make investments in the next six months, down seven points from the previous survey. Over the past six months, 58% reported making capital outlays.
NFIB Chief Economist Bill Dunkelberg noted that while small business owners remain generally optimistic, rising uncertainty and persistent hiring challenges are causing hesitation in investment and expansion plans. Inflation also continues to be a concern, with consumer prices rising 0.4% month over month and 2.9% year over year in December, according to the Bureau of Labor Statistics.
