U.S. NFIB Small Business Optimism Index (April 2026)

Small Business Optimism Remained Subdued in April

• The NFIB's Small Business Optimism Index rose 0.1 point to 95.9 in April, modestly disappointing market expectations for a stronger uptick to 96.1.
• Seven out of the ten index subcomponents improved during the month and three deteriorated. The largest improvement came from the net share of firms reporting higher earnings in the current quarter (up 6 points to -19%). The net share of firms reporting inventories being too low and those planning to increase inventories both rose 3 points to -2%. Notably the largest decline came from the share of firms expecting the economy to improve (down 7 points to 4%).
• The net share of businesses planning to increase employment increased modestly (up 1 point to 13%). The share of firms with unfilled job openings rose 2 points to 34% but has remained broadly unchanged for the past year. Quality of labor concerns increased in April, with 18% of business owners identifying this as their top business problem.
• The net share of firms currently increasing employee compensation fell 3 points to 30%, while the net share planning to do so over the next three months was unchanged at 18%. The share of businesses 'raising' average selling prices rose 5 points to 30% while the share of those 'planning’ to raise average selling prices rose 3 points to 27%.
  
   

Key Implications

• Small business confidence was roughly unchanged in April as it remained near the nadir hit one year earlier during the rollout of reciprocal tariffs. The survey data indicated that small businesses remained stable overall in the current month, but expectations for future performance were showing clear signs of deterioration. This showed up most notably in expectations for the economy to improve, which fell to an 18-month low.
• Inflation remained a growing concern for small businesses in April, one which is likely to increase in May with the national average price of gasoline up 50 cents over the past two weeks. These concerns translated into rising pressure on average selling prices, with the share of firms raising prices in April roughly double the pre-pandemic average. This will be a key metric monitored by the Federal Reserve moving forward, as policymakers seek to prevent a broadening of inflation pressures beyond energy prices. As of the time of writing, financial markets have priced in a roughly 30% chance for an interest rate hike by year-end.

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