Small Business Hiring Plans Just Hit a Four-Year High — and 27% Say They Can’t Find Anyone
NFIB's July 2026 survey: optimism 99.8, hiring plans at net 20% — the highest since 2022. But labor quality complaints jumped 8 points. What to do first.
Small business owners want to hire again. NFIB’s July Small Business Optimism Index, released August 11, rose 2.4 points to 99.8 — the highest reading since August 2025 and above the survey’s 52-year average of 98.0. The component that drove it: a net 20% of owners plan to create new jobs in the next three months, up 9 points from June and the strongest hiring intention since October 2022. The problem showed up in the same survey.
Per the NFIB release as reported by ABA Banking Journal and Tulsa Today, eight of the index’s ten components rose in July:
Optimism Index: 99.8, up 2.4 points.
Hiring plans: net 20% plan to add jobs in three months, up 9 points — highest since October 2022.
Employment Index: 102.1, rising after four straight monthly declines.
Unfilled openings: 36% report positions they can’t fill, up 4 points and the highest since June 2025.
Labor quality/availability as the single most important problem: 27%, up 8 points from June and 15 points above the 12% historical average.
Capital outlay plans: 25% plan expenditures in the next six months, up 5 points — highest since December 2024.
Price plans: net 28% expect to raise prices, down 4 points; net 31% actually raised prices in July, down 7 points.
Real sales expectations: net 7%, down 2 points.
Profit trends: net −16%, an improvement of 4 points.
Uncertainty Index: 91, up 2 points, still far above the 68 historical average.
“Small business optimism rose again in July, with a significant increase in owners expecting to hire.” — Bill Dunkelberg, NFIB Chief Economist
Why it matters
Read the hiring plans and the labor-quality complaint together and the picture stops being a simple confidence story. Intentions jumped 9 points in the same month that “I can’t find qualified people” jumped 8 points and unfilled openings hit a 14-month high. That is demand for labor running into a supply wall — the classic setup for wage escalation, over-hiring on the wrong role, and overtime absorbing the gap while the job posting sits open.
It also sits awkwardly next to the national data. July nonfarm payrolls fell 23,000, with May and June revised down a combined 103,000, and average hourly earnings grew just 3.2% year over year — the slowest since 2021. The macro picture is a cooling labor market. The small-business picture is owners planning to hire into a market where a quarter of them already cannot staff what they’ve got.
Meanwhile pricing power is easing: both actual and planned price increases fell. Hiring more people while raising prices less is a margin question, not an HR question.
What this means for small business owners
Cost the hire before you post it. Fully loaded cost is wages plus employer payroll taxes, workers’ comp, benefits, and — in Washington — Paid Family & Medical Leave and WA Cares premiums. In a market with 36% unfilled openings, the wage you’ll actually have to pay is above the wage you budgeted. Model the offer at the top of your range, not the middle.
Run the overtime-versus-new-hire crossover. If existing staff are absorbing the work at time-and-a-half, calculate the hours per week at which a new hire becomes cheaper. That number is often higher than owners expect once benefits and onboarding are loaded in, and it tells you whether the opening is genuinely a headcount problem.
Check that capital-spending plan against your cash cycle, not your optimism. A quarter of owners plan equipment purchases in the next six months, the most since December 2024. Before signing, run the purchase through a 13-week cash flow forecast alongside the payroll increase — the two decisions are competing for the same cash, and both were made in the same optimistic month.
Watch the margin, since pricing is softening. Actual price increases fell 7 points. If your labor cost per unit is rising while your realized price is flat, that shows up in gross margin by service line long before it shows up in the P&L total. Track margin by line, not blended.
Sanity-check the uncertainty reading. At 91 versus a 68 average, owners are optimistic and unsure simultaneously. That argues for hiring in a way you can reverse — a defined-scope contractor, a part-time role, a temp-to-hire — rather than committing to a full-time salary you would struggle to unwind in the fourth quarter.
The bottom line
The July survey is the most encouraging small-business reading in nearly a year, and it comes with a built-in constraint: the owners who most want to hire are the ones who report they can’t find people. That combination raises wages before it raises headcount. The businesses that come out ahead here will be the ones that priced the hire accurately, ran the overtime math first, and didn’t let one good month of sentiment approve both a payroll increase and a capital purchase in the same week.
