The National Federation of Independent Business (NFIB) released its October 2025 Small Business Optimism Index, showing a slight decline of 0.6 points to 98.2. Despite the drop, the index remains above its long-term average. The Uncertainty Index fell by 12 points to 88, marking its lowest level this year.
“Optimism among small businesses declined slightly in October as owners report lower sales and reduced profits,” said NFIB Chief Economist Bill Dunkelberg. “Additionally, many firms are still navigating a labor shortage and want to hire but are having difficulty doing so, with labor quality being the top issue for Main Street.”
Michael Smith, NFIB State Director for Colorado, commented on the local impact: “Colorado small business owners are not exempt from what we’re seeing nationally. While optimism remains above average, small business owners are contending with a difficult labor market and higher costs.”
The October survey found that 32% of small business owners had job openings they could not fill—unchanged from September and consistent with levels last seen in December 2020 before August of this year. Labor quality was identified as the most significant problem by 27% of respondents, an increase of nine points since September and the highest since November 2021.
Other findings show that more business owners reported lower nominal sales over the past three months compared to September. Reports of positive profit trends also dropped sharply. Both actual and planned price increases were down from previous months; however, planned price hikes remain higher than historical averages, indicating ongoing inflationary pressures.
A net negative percentage of owners reported inventory gains, while supply chain disruptions affected 60% of businesses—a slight improvement from September. The outlook for better business conditions decreased by three points but is still above historic norms.
According to the NFIB’s monthly jobs report, hiring challenges persist: Of those trying to hire in October, most cited few or no qualified applicants available. Plans to create new jobs declined for the first time since May.
Business owners’ concerns about labor costs decreased slightly from September. Fewer plan to raise compensation in coming months compared to earlier periods.
Capital investment also softened somewhat; fewer owners reported capital outlays over the past six months than in September. Most investments went toward equipment purchases or vehicle acquisitions.
When assessing overall business health, fewer respondents described their situation as “good,” while more rated it as “fair.” Only a small percentage saw current conditions as excellent or poor.
NFIB has collected data on small business economic trends through regular surveys since 1973 and releases these reports monthly using responses drawn randomly from its membership base.
In addition to releasing survey results, NFIB announced a new podcast called “Small Business by the Numbers,” hosted by Holly Wade and Peter Hansen from the NFIB Research Center.
