Small business optimism in Iowa and nationwide picked up in June, even as inflation continued to weigh on owners’ outlooks, according to the latest survey from the National Federation of Independent Business (NFIB).
The NFIB Small Business Optimism Index climbed 2.1 points in June to 97.4, edging closer to its 52-year average of 98.0. The increase was driven largely by improved expectations for business conditions and real sales over the coming months. Meanwhile, the Uncertainty Index dropped 2 points from May to 89 — though it remains well above its historical average of 68.
Hiring, however, showed little movement. The NFIB’s Small Business Employment Index held roughly flat at 100.2 in June. A seasonally adjusted 32% of owners reported job openings they could not fill, up 3 points from May, which had marked the lowest level since May 2020.
Inflation remains the top concern
Inflation continued to be the most pressing issue for small business owners. Twenty-one percent named it their single biggest problem, up 3 points from May and the highest share since October 2024.
That concern comes even as some cost pressures show signs of cooling. A net 38% of owners reported raising average selling prices in June, up 2 points from May and the highest level since January 2023 — marking four straight months of rising price increases. But looking ahead, fewer owners expect to keep raising prices: a net 32% said they plan to increase prices over the next three months, down 2 points from May’s reading, which had been the highest since July 2022.
NFIB Chief Economist Bill Dunkelberg said the mixed data reflects a business environment with both bright spots and lingering caution.
“Lower fuel costs provide welcome relief for businesses as well as consumers, with firms anticipating improved operating conditions over the next six months,” Dunkelberg said. “While there have been improvements in the overall environment, high interest rates and modest economic growth are causing owners to approach hiring and capital spending with caution.”
Iowa owners cautiously hopeful
NFIB Iowa State Director Cody Carlson said the state’s small businesses are navigating the same tension between optimism and ongoing cost pressures.
“Iowa’s Main Streets are feeling hopeful despite high costs and workforce shortages,” Carlson said. “While relief from lower fuel costs helps supply chains, inflation remains the top issue for 21% of our business owners. Iowa small businesses are resilient, but they need stability to move past this uncertainty fully.”
Other notable findings
- A net 11% of owners plan to create new jobs in the next three months, up 2 points from May.
- A net 13% of owners expect better business conditions over the next six months, up 10 points — the first improvement in this measure so far this year.
- A net 9% expect higher real sales volumes next quarter, up 8 points from May.
- Twenty percent of owners plan capital outlays in the next six months, up 4 points from May and the highest reading this year.
- A net 0% of owners viewed inventory as “too low,” up 4 points from May and the highest level since May 2025.
- The average interest rate on short-maturity loans fell to 7.4% in June, the lowest since October 2022, while just 22% of owners reported borrowing regularly — down 5 points from May and 12 points below the historical average of 34%.
The NFIB Research Center has tracked small business trends through quarterly surveys since late 1973 and monthly surveys since 1986. Respondents are drawn randomly from NFIB’s membership, and the report is released on the second Tuesday of each month. June’s survey was conducted throughout the month.
