SMB Agency Says War-Related Uncertainty Drives Job Creation to 6-Year Low

Small business job creation plans fell to a six-year low in May, driven by war-related oil prices and uncertainty, according to the National Federation of Independent Business (NFIB).

This drop contributed to small business optimism falling to its lowest level since October 2024. The NFIB’s Small Business Optimism Index for May was 95.3, which was 0.6 points lower than April, according to the organization’s May Small Business Economic Trends.

Six of the 10 components of the Optimism Index decreased. Labor-related components saw the biggest drops, with job openings down by five points, and job creation plans down by four points, according to the report.

Both the share of small business owners who said they had job openings that they could not fill, and the share who said they plan to create new jobs in the next three months, dropped to the lowest level since May 2020.

Smaller declines were seen in expected real sales, inventory satisfaction, capital expenditure plans, and expected business conditions.

Small businesses’ outlook for expansion was unchanged, the report said.

The declines were partially offset by increases in three components of the Small Business Optimism Index: earnings, inventory plans and expected credit conditions, per the report.

“Uncertainty is the enemy of growth and investment, and it is high,” William C. Dunkelberg, chief economist at NFIB, and Holly Wade, executive director of the NFIB Research Center, wrote in the report. “Much is related to the Iran War and its impact on the global oil supply and other commodities, the sooner it’s resolved, the quicker some ‘normality’ will be restored.”

The Conference Board said Monday (June 8) that the decrease in the share of small businesses reporting that jobs are “not able to be filled right now” signaled potential downside risks to the labor market.

The PYMNTS Intelligence May 2026 Small Business Week report looked at business confidence and found that businesses that feel financially stable and operationally capable are more likely to invest in hiring, technology, marketing and expansion.

The report found that businesses that successfully digitized are increasingly pulling away from those that did not. Digitally mature small businesses demonstrate that stronger performance supports additional investment in software and customer acquisition, which then reinforces operational efficiency and growth.