WASHINGTON, D.C. – On the heels of The One, Big, Beautiful Bill becoming law on the Fourth of July, small business optimism hit its highest level in five months, according to the National Federation of Independent Business (NFIB)’s small business optimism index. The percentage of small businesses expecting improving business conditions jumped with more job creators saying right now is a good time to expand their operations.

“Small businesses now have growing confidence in their ability to make hiring and expansion plans for the future,” said Ways and Means Committee Chairman Jason Smith (MO-08).“Permanence of the 20 percent small business tax deduction and enhanced expensing in The One, Big, Beautiful Bill gives them the needed certainty to spur a new era of prosperity. Instead of empty storefronts, America’s Main Streets will boom with more ‘Hiring’ and ‘Grand Opening’ signs.”

Highlights from the July Small Business Optimism Index: 

• Confidence About Expansion Drives Optimism Gains: “The increase in those reporting better business conditions and that it is a good time to expand contributed most to the rise in the Index.”
  • “In July, 16% (seasonally adjusted) reported that it is a good time to expand their business, up five points from June.”
• High Expectations for Better Business Climate: “The net percent of owners expecting better business conditions rose 14 points from June to a net 36% (seasonally adjusted). This reading is comfortably above the historical average.”
• Majority Making Capital Expenditures: “Fifty-five percent of small business owners reported capital outlays in the last six months, up five points from June’s lowest reading since August 2020.”
  • “Of those making expenditures, 38% reported spending on new equipment, 23% acquired vehicles, and 15% improved or expanded facilities. Twelve percent spent money on new fixtures and furniture and 5% acquired new buildings or land for expansion.”
• Taxes Are No Longer Single Most Important Problem: In May, before The One, Big, Beautiful Bill became law, taxes outstripped other concerns as the leading problem for small businesses. In July, taxes are no longer the single most important problem. Quality of labor is the single most important problem at 21 percent.  
• Lowest Concern About Inflation Since 2021: Eleven percent of owners reported that inflation was their single most important problem in operating their business, unchanged from June’s lowest reading since September 2021.

The One, Big, Beautiful Bill delivered for small businesses by permanently locking in the 20 percent small business tax deduction and doubled small business expensing from the 2017 Trump tax cuts. According to a separate NFIB study, permanency of the 199a 20 percent small business deduction will create an estimated 1 million new small business jobs each year over the next decade and 2 million each year in the following years. The boost to America’s economy generated by permanency of this deduction amounts to an additional $75 billion every year for 10 years and then $150 billion each year afterwards. 

Factsheet: The One, Big, Beautiful Bill Fuels America’s Economic Growth

Read: Small Businesses Will Create At Least 1 Million New Jobs Annually If Trump Tax Cuts Are Made Permanent

Read: Small Businesses Will Boost GDP By $150 Billion Annually From Extension of Trump Tax Cuts