Main Street Optimism Ticks Higher; Tariff Inflation Expectations Tumble

Main Street optimism edged higher in August, as the NFIB Small Business Optimism Index rose to 100.8.

As RealInvestmentAdvice.com reports, that reading sits above the long-term average of 98 but missed the consensus estimate of 101.

Stronger sales expectations led the improvement, with a net 12% of owners anticipating higher real sales volumes. This represents a six-point jump from July.

The Uncertainty Index also declined by four points, showing less concern around financing and capital expenditures.

Business health improved as 68% of owners rated conditions “good” or “excellent.”

Profit trends notched their best level since March 2023, while fewer firms raised prices, and financing costs eased. The average short-term loan rate fell to 8.1%, the lowest since May 2023, providing some relief for Main Street borrowers.

On the brighter side, the much feared impact of Trump’s tariffs appears to be evaporating rapidly as fewer and fewer small businesses plan price hikes in the next three months…

Still, Main Street challenges remain.

Owners have consistently cited labor quality as the top issue, with 32% of Main Street reporting unfilled job openings.

While this marks the lowest share since 2020, it still reflects persistent hiring difficulties, especially in construction and manufacturing.

The bottom line: For investors, the survey results are a welcome contrast to broader signs of economic cooling. Main Street is becoming more optimistic again, but the miss relative to expectations and ongoing labor shortages temper the headline.