Small Business Optimism Falls in October

A new report is out from the National Federation of Independent Business (NFIB), and it’s not necessarily something to rave about. In the October 2025 survey, NFIB reports that the Small Business Optimism Index fell by 0.6 points to 98.2, compared with 98.8 in September. Although this result remains just above the long-term 52-year average of 98, it marks a second straight monthly decline.  At the same time, the Uncertainty Index dropped by 12 points to 88—the lowest reading of the year. These readings suggest that while small-business owners feel somewhat less uncertain about the future, their optimism about current and near-term conditions is weakening. Let’s take a look at the highlights of the survey.

Labor Quality Deepens as a Top Concern

The report shows that 27 percent of small business owners cited labor quality as their single most important problem, up nine points from September and the highest level since November 2021. Meanwhile, 32 percent of firms said they had job openings they couldn’t fill, unchanged from the prior month. The message: It’s not just about finding people—it’s about finding qualifiedpeople.

Sales and Profit Trends Are Slipping

The percentage of owners reporting higher nominal sales in the past three months hit negative 13 percent (a six-point drop from September), and the component tracking positive profit trends fell nine points to negative 25 percent. According to NFIB, weaker earnings trends contributed most to the decline in the Optimism Index.

Price / Inflation & Inventory Signals

In October, fewer firms reported raising selling prices: the percentage of owners increasing average selling prices dropped three points to 21 percent. Looking ahead, 30 percent of firms plan to raise prices in the next three months (down one point). Inventory gains also softened, with negative 6 percent of owners reporting inventory increases (a three-point drop). Notably, 60 percent of small business owners said supply-chain disruptions affected their business to some degree — down four points from September.

Future Outlook and Expansion Plans

The percentage of owners expecting better business conditions in the next six months fell three points to a seasonally adjusted 20 percent. Even so, that still remains above the historical average of 4 percent. Only 13 percent said that now was a “good time to expand” their business (up two points), which is still modest compared with prior expansionary periods. Meanwhile, 23 percent of firms plan capital outlays in the next six months (which is up two points).

What It Means for You

Although sentiment remains slightly above average, the downward trend in sales, profits and staffing indicates many firms are feeling pressure despite moderate confidence. Labor-quality problems remain dire; even when jobs are open, finding good applicants is a bottleneck. If your business is hiring or competing for talent, you’re not alone. Additionally, the slowing of price increases and inventory growth points to easing inflationary pressure, but it also signals caution among business owners.

The outlook remains positive on paper, but the “good time to expand” measure is weak. If you are planning to expand your business, now may be a time to carefully evaluate timing, risks and financing. Capital-spending plans ticking up slightly suggest some businesses are positioning for 2026—which might hint at opportunistic moments for investment, training or marketing before the market accelerates again. Our advice? Stay alert, invest in quality talent, watch your profit margins, and prepare for the next shift. And trust the Financial Pantry to continue covering the latest trends, news, and hot topics for small business owners like you.