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U.S. Small Business Optimism Rises as Tariff Tensions Ease; Uncertainty Persists

Lower Chinese import tariffs helped lift small business confidence to 98.8 in May, reflecting stronger sales outlooks despite elevated uncertainty over tax and trade policy.

A woman shops for fruit in a store in New York City, U.S., February 12, 2025. REUTERS/Brendan McDermid
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Overview

  • The NFIB Small Business Optimism Index climbed three points to 98.8 in May, its first gain since December 2024.
  • A tariff reduction on Chinese goods drove an 11-point surge in the share of small businesses expecting higher inflation-adjusted sales volumes.
  • NFIB’s Uncertainty Index ticked up two points to 94, its highest level since July 2024, amid unresolved tax-cut legislation and shifting trade rules.
  • Taxes became the top small business concern for the first time since December 2020, cited by 18% of respondents as their single most important problem.
  • Plans for capital outlays reached their highest level this year even as reported earnings fell and fewer owners flagged labor quality as their primary issue.