The National Federation of Independent Business (NFIB) reported a slight increase in its Small Business Optimism Index for December, rising by 0.5 points to reach 99.5. This figure remains above the index’s 52-year average of 98. The main factor behind the rise was an increase in business owners expecting better conditions, while the Uncertainty Index dropped by seven points from November to 84, marking its lowest level since June 2024.
Suzanne Budge, NFIB’s Idaho state director, commented on the results and their relation to recent state government actions: “Gov. Brad Little’s State-of-the-State and Budget Address nicely complements the slight improvement in NFIB’s latest Small Business Optimism Index. His promise to remain ‘laser-focused on cutting red tape’ is particularly praiseworthy. Of the 75 concerns ranked by NFIB’s Small Business Problems & Priorities report, published every four years, ‘Unreasonable government regulations’ came in 7th in the 2024 report, only a tiny improvement from 6th rank in the 2020 report. ‘State and local paperwork’ ranked 19th out of 75 concerns in the latest report.”
Bill Dunkelberg, NFIB Chief Economist, stated: “2025 ended with a further increase in small business optimism. While Main Street business owners remain concerned about taxes, they anticipate favorable economic conditions in 2026 due to waning cost pressures, easing labor challenges, and an increase in capital investments.”
According to data from December’s index:
– The net percentage of owners expecting better business conditions rose by nine points from November to a net 24%, which contributed most significantly to the overall index rise.
– When evaluating their businesses’ health, nine percent rated it excellent (down two points), fifty-four percent said good (up one point), thirty-four percent fair (up four points), and three percent poor (down two points).
– Taxes were cited as the single most important problem by twenty percent of respondents—an increase of six points from November and the highest reading since May 2021.
Alongside these findings, NFIB has launched a new episode of its “Small Business by the Numbers” podcast featuring Holly Wade and Peter Hansen discussing national small business trends.
The monthly Small Business Optimism Index is widely used by policymakers including the Federal Reserve and members of Congress as an indicator of small business health across America. The index is based on responses from NFIB-member businesses nationwide and is not broken down by state.
NFIB continues its advocacy work for small businesses at both national and state levels. More information can be found at www.nfib.com or through social media channels such as X @NFIB_ID.
