The NFIB Small Business Optimism Index edged down -0.2 pts to 98.6 (vs 98.7 expected) in June 2025, remaining slightly above the 51-year average, as rising inventories and muted sales expectations weighed on sentiment.

• Expected business conditions fell -3 pts to 22, while expected real sales volumes dropped -3 pts to 7. The actual earnings and actual sales indexes both improved but were still negative.

• The Actual Price Changes index increased 4 pts to 29, the highest since February, and the Price Plans index ticked up 1 pt to 32, the highest since March 2024.
• Inflation as the top problem fell to 11%, the lowest since Sep 2021, while taxes rose to 19%, ranking as the top concern for small businesses.

• The Actual Employment index dropped -6 pts to -8, the lowest reading since August 2020. Despite that, hiring plans held steady, and the Job Openings index actually increased 2 pts to 36.
• Labor quality remained the top non-tax concern (16%), though fewer firms saw it as the most important issue than in prior years; labor cost concerns ticked up to 10%.
• The share of owners reporting current inventories as “too high” rose to 12%, while those saying “too low” fell to 7%, contributing the most to the index decline.

• Compensation plans saw a sharp rise, with a net 33% reporting pay increases (+7 pts MoM), the biggest monthly jump since Jan 2020. This may reflect the increasing costs associated with replacing foreign-born workers.