Small business owners in US feel more uncertain about the future

A person walks by a grocery store during a winter storm Wednesday, Feb. 12, 2025, in Chicago. (AP Photo/Erin Hooley)

NEW YORK — Small business owners felt more uncertain about the future in January, as they continue to deal with labor challenges and lingering inflation.

According to a monthly poll of small business owners from the National Federation of Independent Business, the uncertainty index in January rose 14 points to 100 – the third highest recorded reading, after two months of decline. The NFIB said small business owners are feeling less confident about investing in their business due to uncertain business conditions in the coming months.

The response mirrors overall consumer confidence, which plummeted in February, the biggest monthly decline in more than four years, with inflation seemingly stuck and a trade war under President Donald Trump seen by a growing number of Americans as inevitable.

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In the NFIB poll, optimism fell by 2.3 points in January to 102.8, but remained high. Optimism surged after the presidential election, and the index still topped the the 51-year average of 98 for the third month in a row.

“Overall, small business owners remain optimistic regarding future business conditions, but uncertainty is on the rise,” said NFIB Chief Economist Bill Dunkelberg. “Hiring challenges continue to frustrate Main Street owners as they struggle to find qualified workers to fill their many open positions. Meanwhile, fewer plan capital investments as they prepare for the months ahead.”

Eighteen percent of owners reported that inflation was their single most important problem in operating their business, down two points from December and matching labor quality as the top issue.

Labor remains a top headache. A seasonally adjusted 35% of all small business owners reported job openings they could not fill in January, unchanged from December. Of the 52% of owners hiring or trying to hire in January, 90% reported few or no qualified applicants for the positions they were trying to fill.

And fewer small businesses are planning capital investments to expand their business. Twenty percent plan capital outlays in the next six months, down seven percentage points from December.