How recent NFIB data on optimism, inflation, hiring, and tariffs can help shape your next decisions
Data Source
As a small business owner, you’re expected to make quick, confident choices—even when the economy sends mixed signals. The latest Small Business Economic Trends data from the National Federation of Independent Business (NFIB) helps paint a clearer picture of where things stand right now.
This article draws on NFIB’s most recent reports, covering March and April 2025, to highlight what’s changing in areas like hiring, inflation, capital spending, and economic confidence—and how those changes might affect your next move.
Optimism Is Up, But Confidence Has Limits
In April, small business optimism increased to 95.8, up from 90.4 in March. That’s good news. But to keep things in perspective, the long-term average for the NFIB Small Business Optimism Index is 98—so sentiment still isn’t where it used to be.
At the same time, more business owners reported feeling unsure about the future. NFIB’s Uncertainty Index rose from 75 in March to 92 in April. That means many are unsure how things like inflation, interest rates, and new trade policies will play out in the months ahead.
Inflation Is Cooling—But Tariffs Could Stir Things Up Again
Inflation concerns have eased. Only 14% of small business owners said it was their number one problem in April, down from 22% in March. The official inflation rate (Consumer Price Index) was 2.3% in April, the lowest in over three years.
But there’s a twist: tariffs are making headlines again. Although the U.S. paused new tariffs on Chinese imports in mid-May, consumer surveys showed rising concern. In fact, 74% of Americans mentioned tariffs in the University of Michigan’s May sentiment survey—up from 60% the month before.
What to watch: Even if inflation is calming down, costs for goods and materials could rise again in the months ahead, especially if tariffs increase. Smart business owners should be reviewing supplier contracts and planning for pricing flexibility.
Capital Spending and Inventory Investment Are Slowing
Fewer business owners are spending on equipment or expansion. Only 18% said they planned capital investments in the next six months, the lowest since the COVID recession in April 2020.
Likewise, more owners said they plan to reduce inventory, not increase it. This suggests many are playing it safe in case demand softens or costs rise.
Hiring Plans: Slower, Smarter, and More Selective
Hiring is still happening—but not at the pace we saw after the pandemic. Here’s what NFIB data tells us:
Job Openings Are Still High—But Coming Down
In March, 37% of owners had unfilled jobs. In April, that dropped to 34%. Historically, the average is about 22%, so we’re still above normal—but clearly cooling off.
Labor Quality Is Still the Top Challenge
For the third month in a row, 19% of owners said the biggest issue they face is the quality of available workers. That’s remained higher than pre-pandemic levels for several years.
Fewer Businesses Are Creating New Jobs
In April, 13% of owners planned to add jobs in the next 3 months. That’s down from highs in 2021 and early 2022, but still slightly above the long-term average of 11%.
Wages Are Leveling Off
Only 19% of owners said they plan to increase wages soon. That’s back in line with pre-pandemic norms, suggesting the pressure to offer bigger pay just to stay competitive is easing a bit.
What This Means for Your Hiring Plans
- Hiring is still competitive, but not as frantic.
- You may not need to raise wages dramatically to attract good talent—but expect to train.
- Businesses are using trial periods, part-time roles, or contract work to stay flexible.
- Skilled trades, construction, and healthcare are still hard-to-fill categories.
Consumer Confidence Is Falling
The University of Michigan Consumer Sentiment Index dropped to 50.8 in May—its second-lowest reading in history. Why does that matter? Because when consumers are nervous, they tend to spend less, or at least hold off on big purchases.
That means demand could dip temporarily, especially for discretionary or luxury items. Businesses that rely on walk-ins, bookings, or nonessential services should take note.
Economic Growth Slowed in Q1
The U.S. economy shrank by 0.3% in the first quarter of 2025, following a strong finish to 2024. The dip was mostly due to a rise in imports and lower federal spending, though consumer spending and business investment held steady.
The job market added 177,000 new jobs in April, and the unemployment rate remained at 4.2%. So, while growth slowed, we’re not seeing a recession signal yet—just a more cautious pace.
What to Do Now: 5 Smart Moves for Spring/Summer 2025
| Trend | What You Can Do |
| Optimism is improving, but uncertainty is rising | Don’t delay essential decisions, but build in flexibility |
| Inflation is easing, but tariffs may push costs up again | Review vendor pricing and renegotiate if possible |
| Hiring is slowing, not stopping | Hire where needed, but be selective—consider part-time or temp-to-hire |
| Wage pressure is easing | Offer competitive pay, but don’t overextend—highlight benefits and culture |
| Customers are feeling uneasy | Focus on retention and value—remind people why your business matters |
Final Thought
The small business economy isn’t in crisis—but it’s definitely in a pause-and-evaluate phase. If you’re hiring, expanding, or pricing products, now is the time to act with purpose, not panic. Stay informed, plan ahead, and don’t be afraid to adapt your strategy midstream.