Small businesses start 2026 with renewed optimism, highest reading since summer

Small businesses are beginning 2026 with more hope than they've experienced in months, according to new data that could signal positive impacts for the broader economy.

The National Federation of Independent Businesses reported its December optimism index reached 99.5, marking a 0.5-point increase from November and the highest reading since summer 2025.

The NFIB Small Business Optimism Index rose 0.5 points in December to 99.5 and remained above its 52-year average of 98. Of the 10 Optimism Index components, two increased, three decreased, and five were unchanged. An increase in those expecting better business conditions primarily drove the rise in the Optimism Index. The Uncertainty Index fell 7 points from November to 84, the lowest reading since June 2024.

While the current reading shows improvement, it remains below the post-election high of 105.1 from December 2024, when many small business owners expressed excitement about a more business-friendly environment under President Trump.

The optimism took a significant hit this spring when the president unveiled his tariff plans. However, it rebounded during the summer, and the December reading was higher than four out of the previous five Decembers.

Close to two-thirds of business owners are expecting better business conditions going forward.

The survey also revealed an 18-month low in the uncertainty index, and fewer small businesses reported plans to raise prices, which could mean more money staying in consumers' pockets.

"2025 ended with a further increase in small business optimism," said NFIB Chief Economist Bill Dunkelberg.

Dunkelberg said that while Main Street business owners remain concerned about taxes, they anticipate favorable economic conditions in 2026 due to waning cost pressures, easing labor challenges, and an increase in capital investments.

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