NFIB reports small business hiring softened in August

OLYMPIA — Small business hiring activity declined in August, with fewer employers reporting job openings and plans to add workers, according to a jobs report released Sept. 3 by the National Federation of Independent Business.

A seasonally adjusted 35% of small business owners reported job openings they could not fill, down 1 percentage point from July but 11 points above the historical average.

The Small Business Employment Index, which tracks employment activity among small businesses relative to a historical baseline of 100, declined 0.3 points in August to 101.8. The reading remained above the 2025 average of 101.2 and the historical average of 100.

Overall, 56% of owners reported hiring or attempting to hire during August, down 5 points from July. Among all owners surveyed, 47% reported few or no qualified applicants for positions they were trying to fill.

A seasonally adjusted net 17% of owners said they planned to create jobs during the next three months, a decline of 3 points from July.

“Small businesses are slowing down their hiring efforts as the summer comes to an end, with fewer owners reporting job openings or plans to create new positions,” NFIB Chief Economist Bill Dunkelberg said. “The pressure to offer competitive wages is still high, but it’s no longer a top challenge for most Main Street employers.”

A net 31% of owners reported raising compensation in August, unchanged from July, while a net 18% planned to increase compensation during the next three months.

Labor quality or availability was identified as the top operating problem by 23% of owners, down 4 points from July. Labor costs were the top concern for 7%, the lowest level since March 2021.