Small business owners in America are feeling the squeeze, and the numbers confirm it. The NFIB Small Business Optimism Index dropped 0.6 points to 95.3 in May, its lowest reading since October 2024.
That puts the index below the long-term average of 98.0 for two consecutive months.
The numbers paint a grim picture
The May data, released on June 9, showed deterioration across most of the index. Six of the ten components that make up the overall reading declined during the month.
Perhaps more telling than the headline number is the Uncertainty Index, which climbed 3 points to 91. For context, the historical average for that measure sits at 68. So current uncertainty is running roughly 34% above what’s considered normal.
The expansion outlook was equally bleak. Only 7% of survey respondents said they believe it’s a good time to expand their business, unchanged from April and the lowest that figure has been since October 2024.
NFIB Chief Economist Bill Dunkelberg pointed to the usual suspect behind the malaise.
“Persistent inflation continues to challenge Main Street businesses.”
What this means for investors and crypto markets
For crypto markets, the implications are more nuanced but still meaningful. Risk appetite across all asset classes tends to contract when economic confidence erodes. Bitcoin and other digital assets have increasingly correlated with broader risk sentiment over the past several years, meaning a sustained downturn in economic optimism could create selling pressure or at minimum dampen new inflows into the space.
The 7% expansion figure deserves particular attention from anyone watching economic fundamentals. That metric captures forward-looking business intent, not backward-looking performance.