Owner Optimism Slipped Below Its 52-Year Average — And 20% Now Name Inflation Their Top Problem

Small business owners are getting more cautious. The National Federation of Independent Business (NFIB) reported on October 13, 2026 that its Small Business Optimism Index fell 0.8 points in September to 97.9, one-tenth of a point below the 52-year average of 98.0. The Uncertainty Index rose 1 point to 90, far above its historical average of 68.

The headline number is only slightly off the long-run norm. The details underneath are what matter if you set prices, hire, or borrow for a living.

The numbers at a glance

• Optimism Index: 97.9, down 0.8 from August.
• Uncertainty Index: 90, up 1 point, compared with a historical average of 68.
• Good time to expand: 7% of owners (seasonally adjusted), down 5 points.
• Business health: 48% rated conditions "good," down 9 points, while 35% rated them "fair," up 7 points.

Inflation is now the second-biggest worry

Asked to name their single most important business problem, 26% of owners chose labor quality or availability, up 3 points and the top issue for a third straight month. Inflation came next at 20%, up 4 points from August. The historical average for inflation is just 7%, so the concern is nearly three times its normal level.

Poor sales and taxes tied for third at 11% each. Poor sales rose 1 point, the third consecutive monthly increase. Taxes dropped 5 points.

That mix tells a clear story: owners are not mainly afraid of regulation or taxes this month. They are squeezed by the cost of inputs and by a hard-to-fill workforce, while customers are not spending more to make up the difference.

What NFIB's chief economist said

NFIB Chief Economist Bill Dunkelberg said small business optimism held near its long-term average, and that owners are being cautious as they weigh rising costs, interest rates and hiring difficulties.

Tray Abney, NFIB's Nevada state director, called the Optimism Index "not one to write home about" and suggested that the November results, which will be reported in December, will show the election's effect on owner outlooks.

Why the "expand" number is the one to watch

Only 7% of owners called this a good time to expand, a 5-point drop in a single month. Owners rarely say yes to expansion when they expect borrowing to stay expensive or demand to soften. Combined with the shift from "good" to "fair" in business health ratings, it suggests many owners are moving to defense: protecting cash, delaying projects, and waiting for clearer signals.

If you are one of them, you are in the majority. The question is how to hold your position without falling behind.

What this means for your business

Review your pricing now, not at year-end

With one in five owners naming inflation as their top problem, your suppliers are likely adjusting prices too. Pull your last three supplier invoices and compare them with the same items a year ago. If your costs rose and your prices did not, your margin is shrinking even if sales look steady. A current profit and loss statement shows exactly where.

Build a hiring plan around scarcity

Labor quality and availability remains the number-one problem. Instead of waiting for ideal applicants, consider what you can do to keep the people you have: schedule flexibility, clearer roles, and training. If you rely on freelancers to fill gaps, double-check classification rules in our guide on independent contractors vs. employees.

Line up financing before you need it

When owners feel uncertain, they tend to wait until they are short on cash to ask for credit, which is when borrowing is hardest. If you expect to need working capital in the coming months, start conversations with your lender early. Our overview of the SBA loan process explains what lenders ask for, and a separate business bank account with clean records makes any application smoother.

Protect against surprise costs

Uncertainty is highest when unexpected bills arrive. Check that your coverage matches your current operations; the basics are covered in our business insurance guide.

The bottom line

September's reading is not a collapse. Optimism sits essentially at its 52-year average. But uncertainty is 22 points above normal, inflation worry is nearly triple its typical level, and the share of owners who see this as a good time to expand just fell to 7%. The owners who come through this stretch best will likely be the ones who update their prices, tighten their cash planning and secure their staffing before the pressure builds further.

NFIB's next monthly report arrives in November, and it will show whether owners' caution is easing or deepening.

Photo by Ellicia on Unsplash