Small business optimism improves again in August

Wells Fargo Research Team Wells Fargo

Summary

Optimism brightening among small firms

Small business sentiment continued to climb in August. The NFIB Small Business Optimism Index rose half a point to 100.8, the third consecutive month above its historical average of 98. Growing sales prospects and solid earnings appeared to be the driving forces behind August’s improvement. Although uncertainty remained elevated, small business owners also appeared to receive greater clarity amid the unveiling of the administration’s tariff policy and successful passage of the One Big Beautiful Bill Act (OBBA). A drop in job openings at small firms raises some caution, however, supporting our expectation for the Federal Reserve to cut interest rates at its September meeting.

Small business optimism on the rise

The NFIB Small Business Optimism Index rose for the second consecutive month in August to 100.8, moving further above its historical average of 98. Although the underlying components were mixed, this uptick continues the trend improvement that has occurred since April, when the index bottomed coinciding with the Liberation Day tariff announcement.

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Wells Fargo Research Team

Wells Fargo

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