US Small Business Optimism Falls to Three-Month Low as Outlook and Expansion Plans Weaken

Small business optimism in the US dropped to a three-month low in September, driven by weaker expectations for future operating conditions and a decline in the proportion of firms viewing current times as favorable for expansion. According to data released Tuesday by the National Federation of Independent Business (NFIB), the small business optimism index fell 0.8 points to 97.9. Of the 10 components making up the index, six declined, three rose, and one remained unchanged. The uncertainty indicator also ticked up slightly. The net percentage of business owners expecting improved operating conditions fell 4 percentage points to 6%, marking a four-month low. Meanwhile, 31% of firms plan to raise prices over the next three months, up from 28% in August and July. With inflation remaining high and borrowing costs elevated, small businesses have become more cautious about expansion, with capital expenditure plans falling to a three-month low.