Small Business Confidence Dips as Holidays Approach Amid Workforce Pressures
Photo: Unsplash/Tim Mossholder
Small business confidence softened in the fourth quarter of 2025, with a widely tracked sentiment index falling to 68.4 from 72.0 the previous quarter. The decline reflected weaker cash-flow comfort among owners and more cautious expectations for future investment and revenue heading into the new year.
Inflation remained the top concern cited by small business owners, followed closely by rising workforce costs, as many businesses continued to face pressure from both higher input prices and a tight labor market for hourly workers in sectors like retail and hospitality.
Despite the softer sentiment reading, the survey's authors noted that small businesses showed real resilience given the broader economic backdrop, including disruption from the government shutdown earlier in the fall, which delayed some federal loan processing and contracting that many small firms depend on.
Owners surveyed said they were approaching hiring and inventory decisions for the holiday season more conservatively than in prior years, a shift several economists linked to broader uncertainty around tariff costs and financing conditions heading into 2026.
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