20% of Small Businesses Plan to Hire as Optimism Improves

Small businesses in the United States plan to increase hiring as optimism grows, according to the latest edition of the Small Business Optimism Index released Tuesday (Aug. 11) by the National Federation of Independent Business.

The index rose to 99.8 in July, the highest level in nearly a year, the index said.

“Small business optimism rose again in July, with a significant increase in owners expecting to hire, accompanied by an improvement in plans to make capital expenditures,” NFIB Chief Economist Bill Dunkelberg said in a Tuesday news release. “Although uncertainty is currently elevated, Main Street anticipates that business conditions will continue to improve.”

A seasonally adjusted net 20% of small business owners plan to create new jobs in the next three months, a nine-point increase from June, according to the release. Hiring plans are at their highest level since October 2022 and nine points more than the historical average.

Meanwhile, 25% of small business owners said they intend to make capital expenditures in the next six months, up five points from June and the highest reading since December 2024, the release said.

The share of business owners who cited inflation as their most important problem declined for the first time this year, with 14% naming it as their biggest hurdle. That was down seven points from the prior month, per the release.

“Real sales expectations and reports of inventory levels as ‘too low’ both fell by 2 points,” the release said. “The Uncertainty Index rose 2 points from June to 91, remaining well above its historical average of 68. The rise was driven by an increase in owners reporting uncertainty about whether it is a good time to expand and capital expenditure plans.”

Meanwhile, the PYMNTS Intelligence report “Ready for Change: Why Nearly Half of SMBs Want to Ditch Cash and Checks” found that the credit market for small- to medium-sized businesses (SMBs) is one in which “availability and demand can move in different directions.”

Around 61% of SMBs surveyed use a business-specific credit card, but 30% use a personal credit card.

“A business owner using a personal card may still be borrowing for the business, but that activity will not necessarily appear as demand for an SMB loan or business card,” PYMNTS reported July 31. “Other owners may have available credit but decide that current conditions do not justify taking on another fixed obligation. And some businesses simply do not see enough value in changing how they finance everyday operations.”

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