U.S. small-business confidence dropped for a third straight month in February, wiping away much of the gains notched in the aftermath of President Donald Trump’s election victory in November, amid mounting concerns over the administration’s trade policy.
The National Federation of Independent Business said on Tuesday its Small Business Optimism Index fell 2.1 points to 100.7 last month. It mirrored declines in both consumer and business confidence as well as the stock market, which have all erased the so-called Trump bump. The NFIB’s Uncertainty Index rose 4 points to 104, the second-highest reading on record.
“Uncertainty is high and rising on Main Street, and for many reasons,” said NFIB Chief Economist Bill Dunkelberg, without elaborating. Small business owners tend to lean Republican.
The Trump administration’s whiplash trade policy, marked by on-again, off-again tariffs against Canada and Mexico, has caused anxiety among businesses, with economists saying the uncertainty was making it difficult for companies to plan ahead.
Suspended tariffs as well as those being threatened and duties already imposed have led consumers to anticipate higher inflation over the next year and beyond.
The NFIB survey showed the share of businesses raising average selling prices jumped 10 points last month, the largest increase since April 2021, to 32%.
Price increases were frequent in finance, wholesale, agriculture, retail, construction and manufacturing industries.
The proportion planning price hikes rose three points to 29%, the highest reading in 11 months.
The share of owners expecting the economy to improve plunged 10 points to 37%. The proportion saying now is a good time to expand their business fell five points, the biggest decline since April 2020, to 12%.