Summary of US NFIB Report - April 2026

The NFIB (National Federation of Independent Business) report for March 2026 indicates a significant decline in small business optimism in the United States, reflecting a downturn in the overall business cycle. The report highlights several key metrics that illustrate the challenges faced by small businesses, which employ approximately 40% of the U.S. workforce.

Key Findings from the NFIB Report

• NFIB Optimism Index: Decreased by 3 points to 95.8, falling below the historical average of 98. This is lower than the expected 97.9 and the previous month's reading of 98.8.
• Uncertainty Index: Increased to 92, significantly above the historical norm of 68, indicating heightened concerns among small business owners.
• Business Profitability: Experienced the sharpest decline, with the balance falling 11 points to -25%, suggesting a worsening perception of profitability.
• Business Expectations: Marked the third consecutive decline, dropping to 11%, the lowest level since October 2024.
• Labor Market: The Employment Index decreased to 101.6, although it remains above historical averages. There are signs of easing wage pressures, with fewer firms planning wage increases.
• Investment and Activity: Only 16% of firms reported capital expenditure plans, the lowest level since 2009. The sales balance fell to -5%, ending a four-month trend of improvement, and investment plans also declined by -5%.
• Costs and Prices: Rising oil prices are contributing to margin pressures and cost pass-throughs. Actual prices have risen by 25%, but planned price increases are declining, indicating weakening demand.
• Supply Chains: 62% of firms reported supply chain disruptions, which have increased month-over-month, although most disruptions are categorized as moderate or mild.
• Business Conditions Assessment: There has been a decline in the number of firms rating conditions as "good," with an increase in those rating them as "fair," indicating a deterioration in growth quality.

Conclusion

The NFIB data suggests that the U.S. economy is entering a cost-driven cooling phase, with weakening investment and expectations posing downside risks for growth in the upcoming quarters. This trend aligns with recent declines in U.S. GDP estimates. While the labor market remains relatively stable for now, leading indicators are already showing signs of deterioration.