NFIB Index Drops to 98.7 as Sales Weaken

The NFIB Small Business Optimism Index declined to 98.7 in August. This marks a drop of 1.1 points from July. The figure remains slightly above the 52-year average of 98. The Uncertainty Index also fell by two points to 89. This level is significantly higher than the historical average of 68.

Bill Dunkelberg, Chief Economist at NFIB, noted mixed challenges for owners. He cited weakened sales and supply chain disruptions. He stated that expectations for the overall economy have dimmed. However, most owners remain positive about their own business health. According to data reported by GN markets/inflation, 68% of owners rated their business as good or excellent.

Sales Growth Hits Lowest Point

A net negative 9% of owners reported higher nominal sales. This is a five-point decline from July. It is the lowest reading since November 2025. Expectations for better business conditions fell five points to a net 10%. This remains above the historical average of 4%.

Inflation emerged as a greater concern in August. Sixteen percent of owners identified it as their top problem. This is a two-point increase from July. Inflation is now tied with taxes as the second-most cited issue. Supply chain disruptions affected 62% of operations, down one point from July.

Hiring Plans Cool Amid Labor Shortages

The Small Business Employment Index declined 0.3 points to 101.8. This stays above the 2025 average of 101.2. Thirty-five percent of owners reported unfilled job openings. This is 11 points above the historical average. Among those hiring, 82% received few to no qualified applicants.

Only a net 17% of owners plan to create new jobs. This is down three points from July. Dunkelberg noted that wage pressure remains high. However, it is no longer the top challenge for most employers. Arizona’s small business owners are adopting a cautious approach to hiring.