Small Business Owner Expectations Plummet to Record Low in 2025 Amid Inflation and Hiring Challenges
In 2025, small business owners face unprecedented pessimism as inflation and labor shortages dominate concerns, driving expectations to a 48-year low.
Small business owners are increasingly worried about the future as inflation and hiring difficulties continue to weigh heavily on their outlook.
According to the latest survey from the National Federation of Independent Business (NFIB), optimism among small business owners has dropped to its lowest point in 48 years. The NFIB Optimism Index declined slightly by 0.1 points in May, settling at 93.1, marking the fifth consecutive month below the long-term average of 98.
Expectations for improved business conditions over the next six months fell sharply, with a net negative 54% of owners anticipating better times—a historic low in the survey’s nearly five-decade history. This negative trend has persisted monthly since January, reflecting growing uncertainty.
Inflation remains the top concern for 28% of small business owners, though this is a slight decrease from April. Meanwhile, 72% of owners have raised prices, tying the highest level ever recorded and highlighting ongoing cost pressures.
The labor market remains tight, with 51% of owners unable to fill job openings in May. Among those hiring, 92% reported few or no qualified applicants, exacerbating staffing challenges. Labor costs and quality are significant issues, cited as the top business problems by 12% and 23% of owners respectively.
Caleb Silver, Editor in Chief at Investopedia, emphasizes, "Small businesses are often the first to experience economic downturns, making their concerns a critical indicator of broader economic health."
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