The final week in February, gas was at $2.94 a gallon. By the end of March it was up to $3.99, and it has been above $4.00 ever since. In a world where 80% of U.S. small businesses use gasoline for their operations, there was never any doubt that this would have a major impact on their bottom line. But the details of how it would actually play out were less clear. Now, three months in, the data shows a small business community that ok for now, but raising prices and pulling back on investment—both capital improvements and new jobs— in the higher and uncertain fuel cost environment.

Here’s how small businesses have evolved in NFIB’s monthly Small Business Economic Trends:

In the March data, the initial impact came in two forms: Profits and pessimism. The profit metric fell 11 percentage points as businesses suddenly faced higher costs amidst stable revenue. The two sentiment-focused measures (Expect Economy to Improve and Good Time to Expand) also dropped a combined 11 percentage points. Otherwise, the data was reasonably flat. Actual and planned price changes stayed near prior levels for the moment.

The April data showed owners shifting in response to the price shock. Profits rebounded just over half their initial decline, while pessimism worsened, with the two sentiment components down another combined 11 percentage points. Why were profits up? Price increases. The metric for actual price increases increased 5 points, while planned price increases were up 3 points. That’s inflation starting to set in.

The May data showed pessimism beginning to transform into reduced investment. The sentiment indicators were flat, maintaining the low levels they had fallen to in April. Profits were up again, back to within a point of where they were back in February. But when  small business owners are pessimistic, they hesitate to invest. And so the data showed, with a 5-point decline in the percent of owners with current job openings and a 4-point decline in the percent of owners planning to increase employment. In addition, capital spending plans fell to levels last seen in 2009. That’s negative sentiment turning into negative plans.

Meanwhile, the reason for the rebound in profits was crystal clear: More price increases. The net percent increasing actual prices was up another 6 points, and the net percent planning price increases was up 7 points. These metrics are now reaching levels not seen since the major post-pandemic inflation spike, with actual price change at its highest since March 2023 and planned price change at its highest since July 2022. Relatedly, the government stats show inflation rising to 4.2% in May, the highest rate since April 2023.

So where does that leave small business? First, the current situation is not terrible. Profits are in line with their February level, so businesses have steadied the ship there. Actual sales fell from February to March, but they too have stabilized and are doing reasonably well compared to much of 2025. So these important, point-in-time data points say small businesses are doing fine.

But their costs are going up. And they’re increasingly pessimistic. Profits are stable, but they worry that higher prices won’t be good for business. They understand the impact of the moves they’re being forced to make, which is why they’re drawing down investment plans.

The latest announcement of the Middle East negotiations should bring prices down, and just in time. The small business environment is alright, but cracks are showing. If costs stay this high for much longer, reduced investment will have a tangible economic impact. The status quo is ok, but the outlook? The outlook is uncertain.