The National Federation of Independent Business reported an October 2026 Small Business Optimism Index of 97.8, down slightly from September, while its Uncertainty Index declined to 84. The survey also found that taxes had become a significantly larger concern for business owners, while labor availability remained their leading operating problem.
Key Takeaways
- The NFIB Small Business Optimism Index declined 0.1 points to 97.8, slightly below its 53-year average of 98.0.
- The Uncertainty Index fell six points to 84, its lowest reading since December 2025.
- Labor quality and availability remained the leading operating concern, cited by 25% of small business owners.
- Taxes became the second-largest concern, with 21% of owners identifying them as their most important problem, up 10 percentage points from September.
- A seasonally adjusted net 33% of owners reported increasing average selling prices, while 37% planned further price increases.
NFIB Small Business Optimism Index Records a Slight Decline
The National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index reached 97.8 in October 2026, down 0.1 points from September. The reading was 0.2 points below the 53-year average of 98.0.
The NFIB Uncertainty Index fell six points to 84, its lowest level since December 2025. The Optimism Index measures owners’ assessments and expectations, while the Uncertainty Index tracks uncertainty surrounding future business conditions.
NFIB Chief Economist Bill Dunkelberg said optimism remained relatively unchanged, although more owners rated their businesses as being in good or excellent health and reported improved actual sales. He also identified inflation, labor shortages and policy risks as continuing business challenges.
Expectations for better business conditions improved by two percentage points, with a seasonally adjusted net 8% of owners anticipating better conditions over the next six months. Additionally, 11% reported that October was a good time to expand their businesses, up four percentage points from September.
Business Uncertainty Falls to Its Lowest Level Since December 2025
The NFIB Uncertainty Index declined six points to 84 in October, its lowest reading since December 2025. The decrease accompanied a slight change in the Small Business Optimism Index, which fell 0.1 points during the month.
Expectations for better business conditions improved, with a seasonally adjusted net 8% of owners anticipating improvement over the next six months. This represented a two-percentage-point increase from September and followed two consecutive months of declining expectations.
Owners also reported improved expansion sentiment. A seasonally adjusted 11% considered October a good time to expand their businesses, up four percentage points from the previous month.
Business health assessments improved as well. Fifteen percent of owners rated their businesses as excellent, up two percentage points, while 54% rated them as good, up six points. Meanwhile, 26% reported fair conditions, down nine points, and 4% rated their businesses as poor, unchanged from September.
Labor Availability Remains the Leading Operating Problem
Labor quality and availability remained the leading operating concern among small business owners in October, with 25% identifying it as their most important problem. Although the figure declined one percentage point from September, it remained 13 points above the historical average of 12%, marking the fourth consecutive month that labor ranked first.
Hiring difficulties persisted, with a seasonally adjusted 36% of owners reporting unfilled job openings, up four percentage points from September. The share planning to create jobs increased one point to 18%, while 56% reported hiring or attempting to hire employees, up five points.
Among businesses attempting to recruit, 86% received few or no qualified applicants. NFIB member responses also described difficulties finding reliable workers, with business owners in West Virginia and Illinois identifying staffing shortages alongside other operating costs.
The Federal Reserve’s regional employment and labor market findings provide additional context on staffing conditions reported by businesses across different parts of the United States.
Tax Concerns Increase Among Small Business Owners
Taxes became the second-most frequently reported operating problem in October, with 21% of small business owners identifying them as their single most important concern. The figure increased 10 percentage points from September and reached its highest level since May 2021.
The increase changed the ranking of reported business concerns, placing taxes behind labor quality and availability. The survey’s tax measure records the issue owners consider most important, rather than the proportion of businesses reporting any tax-related expense.
The October result also coincided with continued pressure from business operating costs. Owners reported higher selling prices and increased plans to raise prices, providing additional information about the financial conditions affecting their companies.
Previous NFIB findings on small business operating cost pressures have also documented concerns involving inflation, labor expenses and pricing decisions among smaller firms.
A seasonally adjusted net 33% of respondents said they had increased average selling prices, up two percentage points from September. A net 37% planned to raise prices, representing a six-percentage-point increase and the highest reading since July 2022.
These figures measure reported price increases and owners’ plans, respectively. They do not represent the overall inflation rate or a direct measurement of consumer prices across the U.S. economy.
The survey also recorded an increase in borrowing-cost pressure. In October, a net 13% of owners reported paying a higher interest rate on their most recent loan, up five percentage points from September.
That reading was the highest since August 2024. The measure concerns the interest rate reported by owners on their latest borrowing activity, rather than the average interest rate across all outstanding small business loans.
The combination of higher reported tax concerns, selling-price increases and borrowing costs provides several indicators of the financial pressures facing respondents.
For small business owners, these measures relate to different parts of operating finances. Taxes affect business expenses, selling prices reflect pricing decisions, and loan interest rates provide information about borrowing costs.
Inflation and Hiring Conditions Affect Business Operations
The October survey recorded additional changes in inventory decisions, expansion expectations and employment conditions. These indicators provide information about how owners were managing their businesses alongside reported cost and staffing pressures.
Both inventory components of the Optimism Index declined during October. The net percentage of owners reporting inventories as too low fell three percentage points to negative 3%.
Planned inventory investment also decreased three percentage points, reaching negative 1%. The results indicate that inventory assessments and purchasing plans weakened during the month under the survey’s measures.
The employment results showed a different direction. More owners reported hiring or attempting to hire employees, while the proportion planning to create jobs also increased.
However, the finding that 86% of hiring businesses received few or no qualified applicants points to a gap between recruitment activity and applicant availability.
NFIB member comments provided additional examples of operating pressures. A services business owner in Connecticut reported that the cost of doing business had increased while profit margins remained unchanged or declined.
An agriculture business owner in Illinois identified labor and fuel costs as concerns affecting the company’s ability to meet customer demand. The owner also reported difficulty finding reliable employees over a three-year period.
A construction business owner in North Carolina described maintaining a competitive position through supplier selection, timely service and communication with customers.
The October results also show that small business conditions differed across individual indicators. Business health assessments and expansion expectations improved, while inventory measures declined and reported price pressures increased.
The NFIB’s survey provides a monthly assessment of these conditions through its Optimism Index and supporting measures. The October figures cover business owners’ assessments, operating problems and expectations for the six months ahead.
Frequently Asked Questions
What was the NFIB Small Business Optimism Index in October 2026?
The index reached 97.8 in October, down 0.1 points from September. It remained slightly below its 53-year average of 98.0.
How much did the NFIB Uncertainty Index decline?
The Uncertainty Index fell six points to 84 in October. This was its lowest reading since December 2025.
What was the leading operating problem for small businesses in October?
Labor quality and availability remained the leading concern, with 25% of owners identifying it as their most important operating problem.
Why did taxes become a major concern in the October NFIB survey?
Taxes became the second-most frequently reported problem after 21% of owners identified them as their most important concern. This represented a 10-percentage-point increase from September and the highest reading since May 2021.
How many small business owners reported raising their selling prices?
A seasonally adjusted net 33% of owners reported increasing average selling prices in October. A net 37% planned additional price increases, the highest reading since July 2022.
