The Small Business Economic Trends survey showed a 0.6-point decline in the Optimism Index for October, due to a deterioration in earnings. The net percent of owners expecting better business conditions fell 3 points from September.
The Small Business Economic Trends survey showed a 0.6-point decline in the Optimism Index for October. Of the 10 Optimism Index components, four increased, five decreased, and one was unchanged. Review the details below.
Labor
In October, 32% (seasonally adjusted) of all owners reported job openings they could not fill in the current period, unchanged for the second consecutive month. Before August, the last time unfilled job openings hit 32% was in December 2020. 28% had openings for skilled workers (unchanged from September), and 11% had openings for unskilled labor (down 2 points). A seasonally adjusted net 15% of owners plan to create new jobs in the next three months, down 1 point from September. This marks the first decline since hiring plans started to increase in May 2025.
Capital
55% of small business owners reported capital outlays in the last six months, down 1 point from September. Of those making expenditures, 36% reported spending on new equipment (down 6 points), 22% acquired vehicles (unchanged), and 14% improved or expanded facilities (unchanged). Thirteen percent spent money on new fixtures and furniture (up 2 points), and 3% acquired new buildings or land for expansion (down 2 points). 23% (seasonally adjusted) plan capital outlays in the next six months, up 2 points from September.
Sales
A net -13% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down 6 points from September. The net percent of owners expecting higher real sales volumes fell 2 points from September to a net 6% (seasonally adjusted).
Compensation
Seasonally adjusted, a net 26% reported raising compensation, down 5 points from September. A seasonally adjusted net 19% plan to raise compensation in the next three months, unchanged from September.
Credit
A net 5% reported their last loan was harder to get than in previous attempts, down 2 points from September’s highest reading of this year. In October, a net 1% of owners reported paying a higher interest rate on their most recent loan, down 6 points from September. The average rate paid on short maturity loans was 8.7% in October, down 0.1 points from September. Twenty-three percent of all owners reported borrowing regularly, down 3 points from September.
Outlook
In October, overall business health declined from the previous month as fewer owners reported it as good and more reported it as fair. When asked to evaluate the overall health of their business, 12% reported it as excellent (up 1 point), and 51% reported it as good (down 6 points). 33% reported the health of their business as fair (up 6 points), and 4% reported it as poor (unchanged). The net percent of owners expecting better business conditions fell 3 points from September to a net 20% (seasonally adjusted), the lowest level since April, but remaining above the historical average of net 4%.