DES MOINES, IOWA (February 11, 2026) – The NFIB Small Business Optimism Index fell 0.2 points in January to 99.3 and remained above its 52-year average of 98. Of the 10 Optimism Index components, three increased and seven decreased. Expected real sales volume was the only component with substantial change, increasing by six points. The Uncertainty Index rose seven points from December to 91. A rise in owners reporting uncertainty about whether it is a good time to expand their business was the primary driver of the rise in the Uncertainty Index.
“While GDP is rising, small businesses are still waiting for noticeable economic growth,” said NFIB Chief Economist Bill Dunkelberg. “Despite this, more owners are reporting better business health and anticipating higher sales.”
"Agriculture and manufacturing rely on stability, and right now, uncertainty is the biggest hurdle,” said NFIB Iowa State Director Logan Shine.
“With 18% of owners nationwide citing taxes as their top problem, we are looking for federal results that prioritize tax relief and reduced government spending to help us manage rising overhead costs."
One major highlight of this report is the new NFIB Small Business Employment Index, which translates multiple jobs-related questions into one single number. Currently, this index tells a story of a balanced labor market, coming in about 1.5 points above its historical average (101.6 current vs 100 average).
In conjunction with the January report, NFIB also released a new episode of the NFIB Research Center’s “Small Business by the Numbers” podcast. Listen to the latest episode here.
Key findings include:
- In January, 13% reported the cost or availability of insurance as their single most important problem, up four points from December. The last time insurance reached this percentage was December 2018.
- Sixty percent of small-business-owners reported capital outlays in the last six months, up four points from December and the highest level since November 2023.
- In January, a net negative 6% of owners reported paying a higher interest rate on their most recent loan, down three points from December. This suggests that credit markets are turning more favorable for small borrowers.
- In January, 16% of small-business-owners cited labor quality as their single most important problem, down three points from December. This is the third consecutive month that labor quality reported as the single most important problem, has declined.
- The net percent of owners expecting higher real sales volumes over the next quarter rose six points from December to a net 16% (seasonally adjusted).
- The net percent of owners reporting inventory gains rose four points to a net 3% (seasonally adjusted), the highest reading since January 2023. Not seasonally adjusted, 14% reported increases in stocks (up one point), and 17% reported reductions (up 2 points).
- In January, 62% of small-business-owners reported that supply chain disruptions were affecting their business to some degree, down two points from December. Four percent reported a significant impact (up one point), 17% reported a moderate impact (down four points), 41% reported a mild impact (up one point), and 37% reported no impact (up two points).
- The net percent of owners raising average selling prices fell four points from December to a net 26% (seasonally adjusted). Price increases remain well above the historical average of a net 13%, suggesting continued inflationary pressure. Looking forward to the next three months, a net 32% (seasonally adjusted) plan to increase prices, up four points from December.
- In January, overall reported business health improved from December, with more reporting it as excellent and fewer reporting it as fair. When asked to evaluate the overall health of their business, 14% rated it as excellent (up five points), 54% rated it as good (unchanged), 27% rated it as fair (down seven points), and 4% rated it as poor (up one point).
As reported in NFIB’s monthly jobs report, a seasonally-adjusted 31% of all small-business-owners reported job openings they could not fill in January, down two points from December. Unfilled job openings remain above the historical average of 24%. Of the 50% of owners hiring or trying to hire in January, 88% reported few or no qualified applicants for the positions they were trying to fill. A seasonally-adjusted net 16% of owners plan to create new jobs in the next three months, down one point from December.
The NFIB Small Business Employment Index fell nearly one point in January to 101.6, erasing about half of the large gain in December, which reached the highest level since March 2025. The Index remains above the historical average of 100, and just slightly above the 2025 average of 101.2.
In January, 16% of small business owners cited labor quality as their single most important problem, down three points from December. This is the third consecutive month that labor quality, reported as the single most important problem, has declined. Labor quality reported as the single most important problem was the highest in the construction, manufacturing, and professional services industries, and lowest in wholesale and finance.
Sixty percent of small business owners reported capital outlays in the last six months, up four points from December and the highest level since November 2023. Of those making expenditures, 44% reported spending on new equipment (up seven points), 26% acquired vehicles (down one point), and 16% improved or expanded facilities (down 3 points). Thirteen percent spent money on new fixtures and furniture (unchanged), and 5% acquired new buildings or land for expansion (down two points). While more small-businesses reported making a capital expenditure in January, fewer plan to make a capital expenditure in the next six months. Eighteen percent (seasonally adjusted) plan capital outlays in the next six months, down one point from December. Historically, this is a weak reading.
A net negative 6% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up two points from December. Actual sales gains remained below the historical average of a net 0%. The net percent of owners expecting higher real sales volumes over the next quarter rose six points from December to a net 16% (seasonally adjusted).
The net percent of owners reporting inventory gains rose four points to a net 3% (seasonally adjusted), the highest reading since January 2023. Not seasonally adjusted, 14% reported increases in stocks (up one point), and 17% reported reductions (up two points). A net negative 3% (seasonally adjusted) of owners viewed current inventory stocks as “too low” in January, down two points from December. A net negative 2% (seasonally adjusted) of owners plan inventory investment in the coming months, down one point from December.
In January, 62% of small-business-owners reported that supply-chain disruptions were affecting their business to some degree, down two points from December. Four percent reported a significant impact (up one point), 17% reported a moderate impact (down four points), 41% reported a mild impact (up one point), and 37% reported no impact (up two points).
A seasonally-adjusted net 26% of owners reported raising average selling prices in January, down four points from December. The incidence of price increases remained well above the historical average of a net 13%, suggesting continued inflationary pressure. Unadjusted, 36% reported higher average prices (up two points), and 11% reported lower average selling prices (up three points). Looking forward to the next three months, a net 32% (seasonally adjusted) plan to increase prices, up four points from December. Twelve percent of owners reported that inflation was their single most important problem in operating their business (higher input costs), unchanged from December.
Seasonally adjusted, a net 32% reported raising compensation, up one point from December. A seasonally-adjusted net 22% plan to raise compensation in the next three months, down two points from December. The frequency of reports of positive profit trends fell one point from December to a net negative 21% (seasonally adjusted).
Among owners reporting lower profits, 34% blamed weaker sales, 8% cited the rise in the cost of materials, and 14% cited usual seasonal change. Ten percent reported price change for their product(s) or service(s), and 10% cited labor costs. Among owners reporting higher profits, 58% cited sales volume, 15% cited usual seasonal change, and 11% cited higher selling prices.
A net 3% reported their last loan was harder to get than in previous attempts, down two points from December. In January, a net negative 6% of owners reported paying a higher interest rate on their most recent loan, down three points from December. The average rate paid on short maturity loans was 9.1% in January, up 0.7 points from December. Twenty-five percent of all owners reported borrowing regularly, unchanged from December.
Overall business health improved in January, with more reporting it as excellent and fewer reporting it as fair. When asked to evaluate the overall health of their business, 14% rated it as excellent (up five points), 54% rated it as good (unchanged), 27% rated it fair (down seven points), and 4% rated it poor (up one point). The net percent of owners expecting better business conditions fell 3 points from December to a net 21% (seasonally adjusted).
In January, 15% (seasonally adjusted) reported that it is a good time to expand their business, up two points from December. Compared to readings during economic expansions, this is not a strong reading.
In January, 18% of small-business-owners reported taxes as their single most important problem, down two points from December and ranking as the top problem. This suggests that the less consistent issues (labor quality, inflation, poor sales, etc) are not currently in a bad state.
The percent of small-business-owners reporting labor quality as the single most important problem for their business fell three points from December to 16%. This is the third consecutive month that labor quality, reported as the single most important problem, has declined. Labor costs reported as the single most important problem for business remained at 9%.
Thirteen percent of small-business-owners reported the cost or availability of insurance was their single most important problem in January, up four points from December. The last time insurance reported as the single most important problem, was this high was December 2018.
Twelve percent of owners reported that inflation was their single most important problem in operating their business, unchanged from December. The percent of small-business-owners reporting government regulations and red tape as their single most important problem rose two points to 9%.
The percent of small-business-owners reporting poor sales as their top problem fell one point to 9%. Six percent reported competition from large businesses as their single most important problem, unchanged from December. Three percent reported that financing and interest rates were their top business problem in January, unchanged from December.
The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in January 2026.
For over eighty years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington DC and in all fifty state capitals. NFIB is non-profit, non-partisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses, and remains so today. For more information, please visit nfib.com.
