Optimism among America’s small businesses fell last month amid labor and profit headaches.By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions .Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.That’s according to the October edition of the National Federation of Indepe ...

Core Insights - Small business optimism in the U.S. fell to its lowest level in three months, with the Small Business Optimism Index declining to 98.8, reflecting growing concerns about the economy [2][6] - The uncertainty index rose by seven points to 100, marking the fourth highest reading in the survey's 51-year history, indicating significant apprehension among business owners [3][6] Economic Conditions - Business owners expressed fears regarding future sales, inflation, supply chain disruptions, and inventory levels, contributing to the decline in optimism [2][4] - Only 23% of business owners expect improved conditions in the future, a drop of 11 percentage points from August [4] Supply Chain and Pricing - Supply chain disruptions affected 64% of small businesses, an increase of 10 percentage points from August, while 7% reported low inventory levels, the largest monthly drop recorded [5][6] - Nearly 25% of small businesses raised prices in September, a three percentage point increase, with 31% planning to raise prices in the next three months [7] Hiring and Profitability - Despite the challenges, hiring plans among small businesses reached their highest levels since January, and the ratio of business owners reporting profits versus losses was the highest since 2021 [7]

Market Trends & Investment Landscape - Stocks rallied after CPI data release, with major indexes closing higher [1] - Retail investment volumes increased by 23% in the first half of the year compared to 2024 [4] - Brick-and-mortar stores are performing well, accounting for approximately 80% of total retail sales in America [15] - Small business optimism index rose over 1.5 percentage points in July, driven by improved business conditions and expansion plans [40] Consumer Behavior & Spending - US consumers continue to spend, but are shifting towards value retailers like Walmart, TJX, Marshalls, and Dollar General to maximize their dollar [4][5][7] - Consumers are prioritizing essential spending for back-to-school and holiday shopping, rather than discretionary purchases [9] - The top 20% of household income earners in America account for approximately 50% of all consumer spending [24] - Amazon Prime's four-day sales reached $24 billion, exceeding Black Friday sales [18] Economic Factors & Challenges - Labor market softness is causing consumers to feel a pinch and seek better value for their money [6][7] - Retailers are absorbing tariff costs to avoid scaring off consumers with price increases, potentially impacting their bottom line in the short term [19][20] - Concerns exist about the potential impact of tariffs on small businesses and the need for deregulation [43] - There's a growing adoption of AI among small businesses, with adoption rates increasing from 7% to almost 26% [49]