They employ approximately half of the country’s workers and generate about half of the country’s GDP. They’re an important voting block. So how are they feeling about the economy as we head into November’s midterm elections?
Overall, economic sentiment for Donald Trump is poor but small business – admittedly a diverse demographic that’s hard to poll – seems fairly confident. A number of recently published surveys and reports can help understand their mood. This week, the National Federation of Independent Businesses said that its Small Business Optimism Index fell to just below its long-term average, while uncertainty rose slightly.
Labor quality was the top concern for 26% of owners and inflation for 20%. Expansion plans weakened, though 17% still plan to add jobs during the next three months. However, small-business confidence improved significantly in the third quarter, according to the recently published Justworks/US Chamber Small Business Index.
Some 72% of the 750 small businesses surveyed say they are comfortable with their current cash flow, but only 27% believe the US economy is in good health. Inflation remains the biggest problem, cited by 54% of owners. Hiring is not strong, but not weak either.
HR platform Gusto estimated that small businesses added 28,000 jobs in September, making it the eighth consecutive month of employment gains following a decline in January. According to the company’s data, hiring accelerated from August’s revised gain of 18,500 jobs and growth was broad across industries, regions and company sizes, with healthcare and social assistance among the strongest sectors. Particularly notable is that some of the smallest employers continue to participate in the expansion, rather than job growth being concentrated solely among larger companies.
In its latest Small Business Employment Watch report, Paychex, another large HR and payroll processing service (and a client of my company), said that hiring in September essentially matched its 2026 year-to-date average with overall employment among companies with fewer than 50 employees appearing “stable”. ADP, the country’s largest HR and payroll processing service, reported that US private employers added 90,000 jobs in September, with hiring accelerating for the first time since May following three months of slowing growth. Education and healthcare and leisure and hospitality led the gains, while financial activities and professional and business services were weaker.
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