Small businesses in the United States are showing surprising confidence even as overall economic sentiment remains weak, according to multiple recent surveys and employment data. There are 34 million small businesses in the United States, employing approximately half of the country's workers and generating about half of its GDP, making them a significant economic and political force.
The National Federation of Independent Businesses said that its Small Business Optimism Index fell to just below its long-term average this week, with uncertainty rising slightly. Labor quality was the top concern for 26% of owners and inflation for 20%. However, the Justworks and US Chamber Small Business Index showed that confidence improved significantly in the third quarter, with 72% of the 750 small businesses surveyed saying they are comfortable with their current cash flow. Only 27% of those surveyed believe the US economy is in good health, with inflation cited as the biggest problem by 54% of owners.
Employment data from multiple sources paint a mixed picture of hiring among small businesses. Gusto estimated that small businesses added 28,000 jobs in September, marking the eighth consecutive month of employment gains. ADP, the country's largest HR and payroll processing service, reported that US private employers added 90,000 jobs in September, with establishments employing one to 19 workers adding 18,000 jobs. Paychex said that hiring in September matched its 2026 year-to-date average. However, Intuit's QuickBooks Small Business Index, based on data from millions of QuickBooks customers, found that employment at US businesses with one to nine employees fell by 7,000 jobs in September.
Revenue trends offer additional encouragement for small businesses. Intuit's QuickBooks data shows that inflation-adjusted average monthly revenue increased 1.68% in September, with growth occurring in 11 of 12 industries, every region and 19 of 20 states. Fiserv, a payment-processing service, said that its September data showed improving sales among US small businesses, though consumer behavior remains selective with weaker traffic even as customers spend more when they do shop.
The broader manufacturing and service sectors also showed expansion. The Institute for Supply Manager's Manufacturing Purchasing Manager's Index marked its ninth consecutive month of growth in September after years of contraction. The service sector expanded for its 27th consecutive month, with new orders remaining particularly strong. The Wall Street Journal and other media sources reported that first-quarter annualized growth was revised to 2.5% from 2.1%, and second-quarter growth was increased to 2.2% from 1.5%.
For small business owners and savers in the United States, the resilience of small business hiring and revenue growth means economic activity continues despite challenges including high inflation and a tight labor market, though consumer confidence and overall economic sentiment remain subdued.