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Consumers Confident, Despite Rising Costs

[ September 25, 2025   //   ]

Small business confidence continued to climb in the third quarter, according to the latest Small Business Index from MetLife and U.S. Chamber of Commerce.

The third quarter index score of 72, up from 65.2 last quarter, was driven by improved views of both the national and local economies. While optimism is on the rise – particularly around cash flow and economic outlook – small businesses continue to grapple with inflation and escalating costs, which remain the biggest barriers to growth.

“This quarter’s Index reflects a resilient small business community that’s cautiously optimistic about the economy,” said Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce. “But high costs are still holding many back from expanding and investing.”

Among the index’s other key findings:

• Cash flow comfort grows, as 31 percent of small businesses report say they’re very comfortable with their cash flow, up from 23 percent last quarter. 

• About 40 percent say the U.S. economy is in good health, and 46 percent say the same of their local economy – both up from the second quarter.

• Inflation remains top concern: 46 percent cite inflation as the biggest challenge, and 75 percent say rising prices have significantly impacted their business in the past year.

• Costs hinder growth: 34 percent say the cost of goods and services is the biggest roadblock to expansion; 33 percent report being unable to enter new markets due to rising costs.

While inflation and supply chain issues are easing for small business owners, a new challenge is gaining ground: attracting talent. This quarter, 14 percent of small business owners cited talent acquisition as a top concern, a 6 percent increase from the fourth quarter 2024.

“With nearly half of small businesses citing inflation as their biggest challenge, it’s clear that economic pressures persist,” said Bradd Chignoli, executive vice president and head of regional business and workforce engagement at MetLife. “At the same time, we’re seeing attracting employees as a growing concern. Our data shows that in this environment, investing in people through training, relevant benefits packages and personalized communications is not just a response to current challenges, it can be a strategy for long-term growth and stability.”

This quarter’s survey also asked small business owners about where they are making investments. Marketing and sales, customer experience, and inventory top the list. Small businesses are also focusing some of their investments in technology. Younger business owners are more likely to prioritize investing in online customer experience, technology, and AI to support their businesses.

Of the small businesses that said they are investing in technology, most say they are focusing on business software (60 percent), AI, 36 percent; data management and analytics, 32 percent; and cybersecurity software, 27 percent.

The third quarter survey was conducted online in English by Ipsos, July 24 – Aug. 11, with a sample size of 750 small business owners and operators in the U.S., Alaska and Hawaii.

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