Key findings:
- Gen X business small business owners especially feel the economic squeeze, being the least optimistic age group when it comes to the state of the economy
- Small business optimism cools down from the previous quarter, with 38% of small business owners saying that the economy is “excellent” or “good”, down from 46% the previous quarter
- One in four (25%) small business owners say their business has been negatively impacted by the recent mass deportation efforts, with opposition growing to 45%, up from 40% the previous quarter.
- Nearly half (45%) of small business owners cite a negative impact from tariffs
Gen X business are least optimistic about the economy, compared with small business owners from other age groups
Jobs and the economy are more top of mind for Gen X small business owners (SBOs) than other age groups, and they are also least optimistic about the economy:
- 39% say jobs and the economy is their top issue currently, compared with 33% of Gen Z/Millennial SBOs, and 25% of Silent/Boomer SBOs
- Only one in three (35%) say current business conditions are good, compared to 48% of Gen Z/Millennials SBOs and 40% of Silent/Boomer SBOs
- 34% say the economy is currently excellent or good, compared with 39% of Gen Z and Millennials and 42% of Boomer/Silent Generation SBOs
- 37% are confident in the Federal Reserve’s ability to control inflation, compared to 43% of Gen Z and Millennials and 38% of Boomers/Silent Generation SBOs.
Despite Gen X’s current pessimism, Gen Z and Millennial SBOs are the most worried about the US’s likelihood of an upcoming recession (73%), compared with 66% of Gen X and 58% of Silent/Boomer SBOs.
Four in ten (38%) of small business owners say the economy is doing well, down from 46% the previous quarter
Small business owners are less optimistic about the current state of the economy, with (38%) viewing the economy as ‘excellent’ or ‘good’, down from 46% the previous quarter. This decline in sentiment is primarily driven by Democrats (23% to 13%) and Independents (23% to 16%), with 65% of Republican small business owners having a positive view of the economy, on par with the previous quarter (67%). Fears of a recession grow slightly from 61% to 64%.
Inflation concerns flare up again
Fears about inflation rise to previous levels, with 71% of small business owners thinking prices will continue to rise, up from 66% the previous quarter. Only 28% think inflation has peaked, down from 32% in Q3. Small businesses continue to cite rising prices (24%) as the biggest risk to their business currently, ahead of consumer demand (17%), tariffs (10%), supply chain disruptions (10%), and interest rates (10%).
Small business owners remain split along party lines on tariffs, but nearly half (45%) cite a negative impact from tariff policies
Overall, half of small business owners oppose the Trump administration’s tariffs (51%), slightly higher than the 48% who support them.
- 86% of Republican small business owners support the tariffs, while 89% of Democrats oppose them.
Nearly half (45%) of small business owners cite a negative impact from tariffs; even among Republican’s overwhelming support for the tariffs, one in five (21%) say the tariffs have had a negative impact on their businesses.
One in three (32%) small business owners say they have increased prices as a result of the tariffs, while 21% needed to find alternate suppliers, 13% stockpiled inventory, 13% downsized their business, and 12% conducted layoffs or hiring freezes.
Opposition toward mass deportation efforts grow among small business owners as one in four (25%) cite a negative impact to their business
While small business owners are more likely to support the Trump administration’s mass deportation efforts (49% support vs. 45% oppose), opposition has increased to 45% from 40% the previous quarter. One in four (25%) small business owners say the deportation efforts have negatively impacted their business, with impact split across party lines:
- 48% of Democrat small business owners cite a negative impact, compared with 6% of Republican business owners, and 29% of Independents
Small Business Confidence declines to 53, down from 56 the previous quarter, as small businesses owners optimism dips surrounding business conditions, government regulations, and tax and trade policy.
- 40% describe current business conditions as good, down from 44% the previous quarter
- 41% expect government regulations in the next 12 months to have a negative impact on their business, up from 35%.
- 36% expect tax policy in the next 12 months to have a negative impact on their business, up from 32%.
- 43% expect trade policy in the next 12 months to have a negative impact on their business, up from 40%.
Small business owner sentiment declines are mostly driven by Democrat and Independent small business owners. Republicans remain at 68, while Independents decline from 47 the previous quarter to 43, and Democrats see a similar drop from 41 to 37. Confidence in President Trump drops back to previous levels, from 57% (in Q3) to 51% (this quarter) of small business owners approving and 49% (from 42%) disapproving of the way he is handling his job as president.
