A new report from the NFIB has found that optimism in small business fell in May, and uncertainty amongst small business rose.
According to the NFIB Small Business Economic Trends quarterly report, the Small Business Optimism index, small business optimism fell 0.6 points to 95.3, below the average of 98.0 for the past 52 years. At the same time, the Uncertainty Index rose 3 points from April to 91, well above the historical average of 68. The NFIB’s monthly Jobs report showed the NFIB Small Business Employment Index remained flat at 100.3 in May, below 2025’s average of 101.2, but slightly above the historical average of 100.0. The report found that 29 percent of small business owners said they had job openings they couldn’t fill in May, down 5 points from April, marking the lowest level since May 2020.
“AI investment spending has contributed to some excitement in the economy,” NFIB Chief Economist Bill Dunkelberg said. “Despite the enthusiasm around AI, the overall picture is divided. More small business owners are struggling with significant and unpredictable hikes in fuel prices, which are more challenging for small businesses to pass on to their customers compared to their larger corporate competitors.”
The NFIB also found that 9 percent of owners plan to create new jobs in the next three months, down 4 points from April. Thirteen percent of small business owners cited labor quality as their single most important problem, down 5 points from April and marking the lowest level since December 2016. Another 14 percent of business owners reported labor costs as their single most important problem, up 5 points from April and the highest reading in the survey’s history. And 16 percent said they plan to make capital outlays in the next six months, down 1 point from April, and the lowest level since March 2009.
The report also found that business owners reported more supply chain disruptions in May, with 70 percent reporting that supply chain disruptions affected their business, up 6 points from April. Reports of actual and planned price increases also rose significantly, with the net percent of owners raising average selling price up 6 points from April to a net 36 percent, marking the highest reading since March 2023. Eighteen percent of owners cited inflation as their single most important business problem, up 2 points from April.