FOR IMMEDIATE RELEASE
Contact: John Kabateck, California State Director, john@kabstrat.com
or Tony Malandra, Senior Media Manager, anthony.malandra@nfib.org

SACRAMENTO, Calif., March 11, 2025—Today’s release of the latest Small Business Optimism Index by the National Federation of Independent Business (NFIB), which showed the Index falling by 2.1 points in February to 100.7, but still a fourth consecutive month above the Index’s 51-year average of 98, also contained a bit of worrisome news: the Uncertainty Index, which is drawn from the Optimism Index, rose four points to 104 – the second highest recorded reading.

“It would really help alleviate a lot of small business anxiety if Congress would prevent the 20% Small Business Deduction from expiring at the end of the year,” said John Kabateck, state director for NFIB in California. “But the California Legislature could also help and not in a way legislators want to hear—by putting the brakes on many of its proposals that only increase the costs or court time small business owners potentially face. For now, it’s comforting to know that ideas to give unemployment benefits to striking workers already with jobs or to impose newer and bigger health-care mandates on Californians lay dormant  for the moment. But in a legislative body not afraid to practice gut-and-replace tactics, nothing is ever certain until the session is over, and that will not be until the middle of next year.”

NFIB’s monthly Small Business Optimism Index is the gold standard measurement of America’s small business economy. Used by the Federal Reserve, Congressional leaders, administration officials, and state legislatures across the nation, it’s regarded as the bellwether on the health and welfare of the Main Street enterprises that employ half of all workers, generate more net new jobs than large corporations, and gave most of us the first start in our working life. The Optimism Index (aka Small Business Economic Trends report) is a national snapshot of NFIB-member, small-business owners not broken down by state. The typical NFIB member employs between one and nine people and reports gross sales of about $500,000 a year.

From NFIB Chief Economist Bill Dunkelberg

“Uncertainty is high and rising on Main Street and for many reasons. Those small business owners expecting better business conditions in the next six months dropped and the percent viewing the current period as a good time to expand fell, but remains well above where it was in the fall. Inflation remains a major problem, ranked second behind the top problem, labor quality.”

Highlights from the Latest Optimism Index

• The net percent of owners expecting the economy to improve fell ten points from January to a net 37% (seasonally adjusted).
• Twelve percent (seasonally adjusted) of owners reported that it is a good time to expand their business, down five points from January. This is the largest monthly decrease since April 2020.
• Sixteen percent of owners reported that inflation was their single most important problem in operating their business, down two points from January and now just below labor quality as the top issue. The last time it was this low was in October 2021.
• Seasonally adjusted, a net 29% plan price hikes in the next three months, up three points from January and the highest reading in 11 months.

Keep up with the latest California small-business news at www.nfib.com. Follow us on X @NFIB_CA and on Facebook @NFIB.CA.

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For more than 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.

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