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

Small Business Confidence Remains Unchanged in October 

• Small business optimism held steady in October, with the NFIB's Small Business Optimism Index slipping just 0.1 point from September to 97.8. 
• Beneath the steady headline, the details were mixed: four of the index's ten subcomponents improved, five deteriorated, and one was unchanged. 
• The net share of firms expecting the economy to improve rose by 2 points to 8%, while the share saying now is a good time to expand climbed 4 points to 11%. The outlook for sales was unchanged relative to September. Higher interest rates weighed on the outlook for credit conditions and capital outlays, with the respective measures edging lower by 1 and 2 points.
• Hiring intentions strengthened. The net share of businesses planning to increase employment rose by 1 point to 18%, while the share with unfilled positions climbed to 36% from 32% in the prior month. Both measures moved above their six-month averages. 
• As labor demand improved, finding qualified workers remained a pressing concern. A quarter of business owners identified labor quality as their top business problem in October, ahead of inflation and taxes. 
• Wage pressures picked up alongside stronger hiring activity. The net share of firms raising employee compensation increased by 1 point to 29%, while the share planning to raise compensation over the next three months jumped by 4 points to 24%—its highest level since December 2025. 
• Businesses also showed a greater willingness to raise prices. The share raising average selling prices edged up to 33% after holding steady for three months, while the share planning price increases jumped by 6 points to 37%—the highest level since July 2022. 
   

Key Implications

• Small-business sentiment was little changed in October, but there were some signs of improvement beneath the surface. More owners viewed their businesses as being in good or excellent health, uncertainty declined, and expectations for the economy improved. Hiring plans also strengthened, consistent with the resilience seen in October’s payroll report.
• That said, investment plans were scaled back amid higher interest rates, while cost pressures remained prominent, with more businesses planning wage and price increases. Combined with the recent strength in hiring, today’s data reinforce the case for another Federal Reserve rate increase in December.
  
   

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