WASHINGTON, Oct. 13 (Xinhua) -- U.S. small business uncertainty is growing amid high interest rates and inflation, according to data published Tuesday by the National Federation of Independent Business (NFIB).
The group's monthly small business optimism index declined 0.8 points in September to 97.9, one-tenth of a point below the 52-year average of 98.0. At the same time, the organization's uncertainty index rose 1 point to 90, remaining well above the historical average of 68.
"Small business optimism stayed near the long-term average in September as Main Street owners remain uncertain about business conditions," said NFIB Chief Economist Bill Dunkelberg. "Small business owners are proceeding with caution as they interpret how rising costs, interest rates, and the difficulty in finding qualified employees are impacting their business."
Some economists said both the war in Iran and the cost of energy are major issues impacting small businesses.
Dean Baker, a macroeconomist and co-founder of the Center for Economic and Policy Research, told Xinhua: "High energy prices and the war are the big issues. With the stalemate continuing, businesses are becoming more pessimistic about the war ending any time soon."
One top issue of concern for small businesses was inflation, with 20 percent of owners reporting it as their single most important problem, up 4 points from August.
Only 7 percent of owners reported that it was a good time to expand their business, down 5 points from August.
Small business owners' self-evaluation of the health of their business turned more negative in September, with substantially more owners rating their business as "fair" -- 35 percent, up 7 points -- and fewer rating them as "good" -- 48 percent, down 9 points.
A net 8 percent of owners reported paying a higher interest rate on their most recent loan, up 4 points from August and the highest level since June 2025. The average interest rate on short-maturity loans was 8.2 percent in September, up 0.7 points from August and close to the historical average of 8.3 percent.
The findings come less than a month before the U.S. midterm elections, in which Republicans, the party in power, are widely expected to lose seats and even cede control of Congress to Democrats.
One factor weighing on Republicans is that President Donald Trump had campaigned on promises to tamping down inflation, which had surged under the previous administration.
Trump has so far not delivered on those promises, and experts said there is very little that any politician, Democrat or Republican, can do to reduce inflation. Bringing down persistently high prices often requires the Federal Reserve to raise interest rates to levels that could trigger an economic downturn, a move few politicians would want to support.
Some experts said uncertainty is bad for economic growth.
Brookings Institution Senior Fellow Darrell West told Xinhua: "Small businesses (account for) many of the American jobs, so uncertainty in that sector due to energy costs and supply chain risks is very problematic just a few weeks before the election."
"Uncertainty generally means businesses slow their hiring and spending, which is bad for economic growth. This is part of the affordability challenge facing Republicans in the midterm elections," West said.
Other experts said Republicans are having a tough time creating economic relief before the midterm elections.
Clay Ramsay, a researcher at the Center for International and Security Studies at the University of Maryland, told Xinhua: "Employees in small businesses can't help but know when their owners and managers are under strain. Republicans are groping for ways to create relief, but there is no time left before the midterms for such measures to take effect." ■
