US small business sentiment lifts for first time in 2025
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The news: The National Federation of Independent Business (NFIB) optimism index saw sentiment among small US businesses increase in May, the first rise this year as firms become more positive about the economic outlook.
The numbers: The index climbed 3 points to 98.8 in May, the first rise since December, with seven of the survey’s 10 sectors improving on the back of stronger expectations for business conditions and sales.
The context: Despite the lift, the NFIB’s uncertainty index also increased, suggesting that the impact of US President Donald Trump’s tariffs are still ricocheting through the economy.
18% of small business owners reported taxes as their single most important problem, up two points from April and ranking as the top concern.
"Congress hasn't passed the big beautiful bill yet, and Trump is still messing with tariffs, the uncertainty level is rising," said NFIB chief economist Bill Dunkelberg.
"While tariffs might be a bumpy road while countries negotiate trade deals, Congress can do their part by passing the BBB sooner rather than later to take that piece of uncertainty off the table."
The percentage of owners expecting higher real sales volumes rose 11 points from April to a net 10% (seasonally adjusted), contributing the most to the Optimism Index’s improvement. Despite the optimism, 13% of owners saw lower sales over the past three months, up from 8% in April. Firms also reported difficulty obtaining loans and predict tougher credit conditions in the short term.
"Overall, the economy will continue to stumble along until the major sources of uncertainty are resolved," said Dunkelberg. "It's hard to steer a ship in the fog."
The sources: NFIB, NFIB press release
