Small-Business Optimism Remains Steady, Though Owners Finding It Hard to Hire Workers

The OBBB will “create one million jobs on main street. It’s going to create $750 billion in economic activity,” said the SBA administrator.

A hiring sign during Black Friday at a mall in Hanover, Md. Madalina Vasiliu/The Epoch Times

Small-business optimism in the United States remained steady in June, while the main concern is taxes, according to the influential National Federal of Independent Business (NFIB) index reading published on July 8.

The NFIB Small Business Optimism Index edged down by 0.2 percent of a point, to 98.6, slightly above the 51-year average of 98, according to the association’s press release. Increase in excess inventories, dwindling overall business health, and lower net future optimism pulled down on the index.

NFIB chief economist Bill Dunkelberg said that the index did not fall in June due to the alleviation of economic uncertainty.

“Taxes remain the top issue on Main Street, but many others are still concerned about labor quality and high labor costs,” with nearly one in five small-business owners reporting taxes as their single most pressing concern, he said in the release.

Other key findings of the survey included a decline in higher sales volume expectations from May, but a lower percentage of owners complained about inflation and higher input costs.

“When asked to rate the overall health of their business, 8 percent reported excellent (down six points), and 49 percent reported good (down six points). Thirty-five percent reported the health of their business was fair (up seven points), and 7 percent reported poor (up three points),” said the statement.

Survey components such as current job openings, expansion intentions, trend of earnings, and plans to increase employment showed a positive monthly trend.

The U.S. economy added a better-than-expected 147,000 jobs last month, according to data from the Bureau of Labor Statistics released on July 3. There was an increase in the number of employed full-time workers, with average hourly earnings rising by 0.2 percent.

Despite the dip in unemployment, the NFIB reported earlier this month that small-business owners were struggling to fill open spots. Many owners said that they could not find qualified applicants for the positions they were trying to fill.

Based on the latest index readings, a significant number, 9 percent of owners, said that government regulations and red tape were hindering their business growth. That was higher than the number of people complaining about competition from large businesses.

As taxes remain a source of worry, the NFIB’s Hawaii office commended the Trump administration for not letting the 20 percent business deduction expire this year.

Big Beautiful Bill Impact

The One Big Beautiful Bill Act, signed into law on July 4 by President Donald Trump, gives small-business owners, contractors, and gig economy workers a permanent extension of the Section 199A pass-through business deduction.

The provision, which was previously set to expire after 2025, allows certain business owners to deduct up to 20 percent of their qualified business income.

The legislation will “create one million jobs on Main Street. It’s going to create $750 billion in economic activity,” SBA Administrator Kelly Loeffler said in a July 8 post on social media platform X.

Without the law, 26 million small businesses would have seen their top tax rate double, to 43 percent, Loeffler said in an earlier press release.

Besides the tax break, the law removes the requirement that Venmo, PayPal, and other gig transactions worth more than $600 be reported to the IRS, and supports American manufacturing by “allowing 100 percent expensing for new factories, factory improvements, equipment, and research and development.”

Meanwhile, the Tax Foundation, a Washington-based nonprofit, said that the reductions of business taxes would have an adverse impact on the country’s deficit.

“The House version would cost more than $700 billion over the next decade ($800 billion according to the Joint Committee on Taxation), while the Senate version costs ‘just’ $655 billion under our estimates,” the foundation said in a July 7 report.

The recent trade deal between the United States and Vietnam has created a sense of cost certainty in the U.S. retail sector as businesses place their holiday orders with manufacturers, Bank of America (BofA) retail analyst Lorraine Hutchinson said during an interview with CNBC.

For the United States, “Vietnam is the most important country for most public apparel and footwear retailers,” Hutchinson said. Vietnam was the second-largest source of apparel and accessory imports in the United States last year, according to data from Statista. The United States imported $15.11 billion of such products from Vietnam.

U.S. retailers are getting ready to finalize their orders for Christmas, “which is when they make all their money,” Hutchinson said. However, the tariff situation had created uncertainty among businesses, she said.