DES MOINES, IOWA (November 14, 2025) — The National Federation of Independent Businesses (NFIB) Small Business Optimism Index declined 0.6 points in October to 98.2 but remained above its 52-year average of 98. The Uncertainty Index fell twelve points from September to 88, the lowest reading of this year.
“Optimism among small businesses declined slightly in October as owners report lower sales and reduced profits,” said NFIB Chief Economist Bill Dunkelberg.
“Additionally, many firms are still navigating a labor shortage and want to hire but are having difficulty doing so, with labor quality being the top issue for Main Street.”
"The drop in national small-business optimism is concerning for Iowa’s Main Street businesses, particularly the report of lower sales and negative earnings trends,” said NFIB Iowa State Director Matt Everson.
“Iowa’s small businesses are already burdened by inflation and high property taxes, and lower sales will make it harder to keep up with the cost of doing business. Lawmakers must reform taxes to give our small businesses much-needed relief.
“This signals commodity prices and local farm spending may face further headwind, underscoring the urgency for state-level support to help local businesses manage persistent labor quality issues, which remain the top problem."
In conjunction with the October report, NFIB is also débuting a new podcast: “Small Business by the Numbers” — this is the NFIB Research Center’s new podcast, where we discuss everything related to the small-business economy. Guests and host Holly Wade, the Executive Director of the NFIB Research Center, will discuss the data, stories, and economic conditions affecting small businesses nationwide. Listen to the intro episode here.
Key findings include:
- Thirty-two percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, unchanged for the second consecutive month. Before August, the last time unfilled job openings hit 32% was in December 2020.
- In October, 27% of small business owners cited labor quality as their single most important problem, up nine points from September and the highest level since the record high of 29% in November 2021. Labor quality ranked as the top problem and was eleven points higher than taxes, which ranked second.
- A net negative 13% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down 6 points from September.
- The frequency of reports of positive profit trends fell nine points from September to a net negative 25% (seasonally adjusted). This component contributed the greatest to the decline in the Optimism Index.
- In October, both actual and planned price increases fell from the previous month. The net percent of owners raising average selling prices fell three points from September to a net 21% (seasonally adjusted). Looking forward to the next three months, a net 30% (seasonally adjusted) plan to increase prices (down one point from September).
- The net percent of owners reporting inventory gains fell 3 points to a net negative 6% (seasonally adjusted). Not seasonally adjusted, 10% reported increases in stocks (unchanged), and 15% reported reductions (up 3 points).
- In October, 60% of small-business-owners reported that supply-chain disruptions were affecting their business to some degree, down four points from September.
- The net percent of owners expecting better business conditions fell three points from September to a net 20% (seasonally adjusted), the lowest level since April but remaining above the historical average of net 4%.
As reported in NFIB’s monthly jobs report, a seasonally-adjusted 32% of all small-business-owners reported job openings they could not fill in October, unchanged for the second consecutive month. Before August, the last time unfilled job openings hit 32% was in December 2020. Of the 56% of owners hiring or trying to hire in October, 88% reported few or no qualified applicants for the positions they were trying to fill. A seasonally-adjusted net 15% of owners plan to create new jobs in the next three months, down one point from September. This marks the first decline since hiring plans started to increase in May 2025.
Labor costs reported as the single most important problem for business owners fell by three points from September to 8%. Seasonally adjusted, a net 26% reported raising compensation, down five points from September. A seasonally-adjusted net 19% plan to raise compensation in the next three months, unchanged from September.
Fifty-five percent of small business owners reported capital outlays in the last six months, down one point from September. Of those making expenditures, 36% reported spending on new equipment, 22% acquired vehicles, and 14% improved or expanded facilities. Thirteen percent spent money on new fixtures and furniture and 3% acquired new buildings or land for expansion. Twenty-three percent (seasonally adjusted) plan capital outlays in the next six months, up 2 points from September.
A net negative 13% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down six points from September. The net percent of owners expecting higher real sales volumes fell two points from September to a net 6% (seasonally adjusted).
The net percent of owners reporting inventory gains fell three points to a net negative 6%, seasonally adjusted. Not seasonally adjusted, 10% reported increases in stocks, and 15% reported reductions. A net negative 4% (seasonally adjusted) of owners viewed current inventory stocks as “too low” in October, up three points from September’s largest monthly decline in the survey’s history. A net negative 2% (seasonally adjusted) of owners plan inventory investment in the coming months, down three points from September.
In October, both actual and planned price increases fell from the previous month. The net percent of owners raising average selling prices fell three points from September to a net 21% (seasonally adjusted). Despite the decline, price increases remain above the monthly average of a net 13%, suggesting continued inflationary pressure.
Unadjusted, 31% reported higher average prices (down two points), and 12% reported lower average selling prices (up two points). Looking forward to the next three months, a net 30% (seasonally adjusted) plan to increase prices (down one point from September).
The frequency of reports of positive profit trends fell nine points from September to a net negative 25% (seasonally adjusted). This component contributed the greatest to the decline in the Optimism Index. Among owners reporting lower profits, 33% blamed weaker sales, 16% cited the rise in the cost of materials, 9% cited price change for their product(s) or service(s), and 9% cited labor costs. Among owners reporting higher profits, 53% cited sales volume, 17% cited usual seasonal change, and 11% cited higher selling prices.
A net 5% reported their last loan was harder to get than in previous attempts, down two points from September’s highest reading of this year. In October, a net 1% of owners reported paying a higher interest rate on their most recent loan, down six points from September. The average rate paid on short maturity loans was 8.7% in October, down 0.1 points from September. Twenty-three percent of all owners reported borrowing on a regular basis, down three points from September.
In October, owners’ overall assessment of their business’ health declined from the previous month as more owners reported it as “fair” than “good”. When asked to evaluate the overall health of their business, 12% reported it as excellent (up one point), and 51% reported it as good (down six points). Thirty-three percent reported the health of their business as fair (up six points), and 4% reported it as poor (unchanged).
The net percent of owners expecting better business conditions fell three points from September to a net 20% (seasonally adjusted), the lowest level since April but remaining above the historical average of net 4%.
In October, 13% (seasonally adjusted) reported that it is a good time to expand their business, up two points from September. Compared to readings during economic expansions, this is a relatively weak reading.
Twenty-seven percent of small-business-owners reported labor quality as their single most important problem, up nine points from September and ranking as the top problem. The percent of small-business-owners reporting labor costs as their single most important problem fell three points to 8%.
Twelve percent of owners reported that inflation was their single most important problem in operating their business, down two points from September.
The percent of small-business-owners reporting poor sales as their top business problem remained at 10%.
In October, 8% reported the cost or availability of insurance as their single most important problem, unchanged from September. Two percent reported that financing and interest rates was their top business problem in October, down two points from September.
Five percent reported competition from large businesses as their single most important problem, unchanged from September.
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 October 2025.
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.
