The NFIB Small Business Optimism Index rose to 98.8 in May, up three points from April and above the 51-year average of 98, the National Federation of Independent Business reported Tuesday.
Despite this increase in optimism, the Uncertainty Index also climbed to 94, two points higher than the previous month.
NFIB Chief Economist Bill Dunkelberg said that while small business optimism improved slightly, uncertainty remains high. He noted that the economy will likely continue to struggle until key uncertainties are resolved. Still, more business owners expect better conditions and sales growth.
The share of owners anticipating improved business conditions jumped 10 percentage points to 25%, and those expecting higher real sales volume rose 11 points to 10%.
The report linked the rising uncertainty to unresolved trade issues, especially tariffs and the delay in passing President Trump’s “One Big Beautiful Bill” (BBB). The NFIB urged Congress to pass the BBB soon to reduce uncertainty.
Earlier this year, the PYMNTS Intelligence SMB Growth Report found that tariff changes created a tough environment for many small and medium-sized businesses.
On May 22, S&P Global reported that U.S. business activity and sentiment improved but remained cautious due to ongoing tariff tensions. S&P’s chief business economist, Chris Williamson, said some companies are acting early to avoid future tariff impacts, especially with a 90-day tariff pause set to expire in July.
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