Small business optimism ended 2025 on a positive note
Summary
The NFIB small business optimism index rose modestly to 99.5 in December, with the underlying details revealing largely positive trends. Sturdy economic fundamentals and increasing clarity around public policy appeared to lift small firms’ economic expectations, while uncertainty around the economic outlook fell back to its lowest point since June 2024.
Weaker sales expectations were the largest drag on optimism. However, they remained firmly positive on net. Small business labor trends also appear stable at present, as evidenced by hiring plans increasing slightly in December. Finally, the prevalence of small business price hikes abated, which is in line with this morning’s softer-than-expected CPI reading.
Low response rates may have distorted recent NFIB trends somewhat. Only 429 business owners responded to December’s survey, significantly less than the 513 that responded in December 2024. Although small sample sizes may be distorting the numbers, improving optimism is generally consistent with healthy macroeconomic data at the end of 2025.
Author
Wells Fargo Research Team
Wells Fargo
