Confidence among U.S. small businesses strengthened in July, with hiring plans reaching their highest level in nearly four years even as uncertainty over expansion and capital spending increased, according to the National Federation of Independent Business (NFIB).
The NFIB Small Business Optimism Index climbed to 99.8 in July from 97.4 in June, reaching its highest level since August 2025 and exceeding the 97.5 forecast.
Eight of the index’s 10 components improved during the month, while two declined.
Hiring plans provided the largest contribution to the increase. A net 20% of small-business owners said they planned to create jobs over the next three months, up nine percentage points from June and the highest reading since October 2022.
Labor conditions, however, remained a challenge. The quality or availability of workers was the most frequently reported problem among business owners in July.
Price pressures showed signs of moderation. The net share of businesses reporting increases in average selling prices dropped seven percentage points to 31%. The share planning to raise prices declined four points to a net 28%.
Other indicators were more mixed. Expectations for real sales declined by two points, while the share of businesses reporting inventories as too low also fell by two points.
At the same time, the NFIB Uncertainty Index increased by two points. The rise reflected greater uncertainty among business owners about whether current conditions were favorable for expansion and about future capital expenditure plans.
The July figures point to stronger small-business sentiment and increased hiring intentions alongside continued caution over investment and business expansion.
