Data from the National Federation of Independent Business (NFIB) reveals that the proportion of small US businesses planning to increase hiring rose sharply in July, reaching its highest level since October 2022. The net share of business owners intending to hire staff over the next three months climbed to 20%, a 9-percentage-point increase from June.

According to the NFIB report released on Thursday, the small business employment index rose nearly 2 points to 102.1. Small businesses continue to be a key driver of employment growth. A private sector report released this week showed that more than half of the new jobs added in July came from small businesses. Official data scheduled for release on Friday is expected to show that private sector employment grew by 80,000 jobs in July.

"Hiring plans indicate that small business owners anticipate significant growth in their operations and will need more employees," said NFIB Chief Economist Bill Dunkelberg in a statement. The NFIB data also showed that compensation metrics have risen. The net share of business owners who reported raising wages stood at 31%, up 3 percentage points from June. Meanwhile, 19% of business owners indicated plans to increase compensation over the next three months, a 2-percentage-point rise from the previous month.

The proportion of business owners reporting job openings that they could not fill reached its highest level since June 2025. The NFIB data further highlighted that 27% of business owners cited labor quality or availability as their most critical operational issue, an 8-percentage-point increase from June.