The National Federation of Independent Business (NFIB) reported that the U.S. Small Business Optimism Index rose to 100.3 in July 2025, surpassing expectations of 98.9 and marking a 1.7-point increase from the previous reading of 98.6. This level represents a five-month high for small business sentiment, driven by improved economic conditions and more positive expectations regarding business conditions and expansion opportunities. According to NFIB Chief Economist Bill Dunkelberg, optimism increased slightly as owners expressed greater confidence in the economic outlook. Key factors contributing to the rise include improved hiring plans, a higher percentage of owners indicating it is a good time to expand (16%), and a reduction in price pressures. However, concerns over labor quality intensified, and overall uncertainty about the economic outlook remained elevated. The index also reflects the impact of the House GOP's legislation making the 20% small business deduction permanent, which is expected to support growth, hiring, and investment among entrepreneurs.