The NFIB Small Business Optimism Index rose 2.4 points in July to 99.8, up from a revised prior reading of 97.4, according to the NFIB's monthly report. The figure came in well above the consensus expectation of 97.5 and surpassed the index's 52-year historical average of 98.0, reaching its highest level since August 2025.

The July gain was broad-based, with eight of the index's 10 components posting improvements while two declined. The strongest contribution came from hiring plans, signaling a renewed willingness among small business owners to expand their workforces. Small businesses employ roughly half of all private-sector workers in the United States, making hiring intentions at this scale a closely watched input for labor-market and monetary policy assessments.

NFIB Chief Economist Bill Dunkelberg stated: "Small business optimism rose again in July, with a significant increase in owners expecting to hire, accompanied by an improvement in plans to make capital expenditures. Although uncertainty is currently elevated, Main Street anticipates that business conditions will continue to improve."

Labor-market expectations were among the most notable features of the July report. The NFIB Small Business Employment Index climbed to 102.1, rebounding after four consecutive months of declines. Labor demand remained strong, though small businesses continued to report difficulties finding suitable workers. Persistent labor shortages can place upward pressure on wages and operating costs while potentially limiting the ability of businesses to respond to stronger demand.

Capital expenditure plans also improved during the month, reinforcing the broader rise in optimism. Capital spending decisions tend to reflect business owners' expectations about future economic conditions, and the increase in investment plans suggests that more businesses are becoming comfortable committing resources to expansion, equipment, and other productive capacity.

The NFIB Uncertainty Index rose 2 points in July to 91, remaining well above its historical average of 68. The increase was driven primarily by a larger share of business owners expressing uncertainty over whether it is a good time to expand, along with shifts in capital expenditure plans. The simultaneous rise in both optimism and uncertainty is notable, as elevated uncertainty has historically been associated with more cautious business investment and hiring decisions, even when sentiment improves.

The NFIB index is one of the longest-running surveys of small business sentiment in the US and is widely referenced by Federal Reserve officials, economists, and market participants as a real-time gauge of Main Street conditions. With the headline optimism index now above its long-term average, hiring plans strengthened, and capital expenditure expectations improved, the July data presents a generally positive picture of the US small-business sector, though the persistence of elevated uncertainty warrants attention in coming months.