The NFIB Small Business Optimism Index fell to 100.7 in February, down 2.1 points from January, with uncertainty reaching its second-highest level at 104. The index’s reading on expansion plans decreased by 5 points, the largest monthly drop since April 2020.
A survey of small businesses raised concerns about stagflationary pressure, citing a decline in business owners’ confidence that the economy will grow and worsened profit trends. Only 12% of owners believe it is a good time to expand, a 5-point decrease from January. The share of business owners raising average selling prices increased by 10 points from January, its largest monthly increase since April 2021.
The survey’s findings are echoed by the University of Michigan sentiment survey, which tumbled 11% and year-ahead inflation expectations jumped to 4.9%. Torsten Sløk, chief economist at Apollo Global Management, described the economy as “wait-and-see,” with consumers and firms becoming increasingly cautious about spending decisions.
The mounting pessimism among small-business owners is a concern due to their significant role in the US economy, accounting for over 80% of total employment. As uncertainty continues to rise, it remains to be seen how businesses will adapt to stagflationary pressure and future economic changes.
Source: https://fortune.com/2025/03/15/stagflation-economic-outlook-small-business-recession-inflation-trump-tariffs-doge-layoffs