The Valley Chronicle - California Comment on Latest Small Business Optimism Index

SACRAMENTO, Calif., May 12, 2026—From John Kabateck, state director for the National Federation of Independent Business (NFIB) in California, on today’s release of NFIB’s monthly Small Business Economic Trends (SBET) report showing it falling below its 52-year average of for the second month in a row. April’s 95.9 reading came in under the 98.0 historic average.

“We just held our annual Small Business Leadership Day in Sacramento, and like their small business counterparts across the nation, Main Street entrepreneurs in California discussed the same problems with labor quality and taxes, but unlike their counterparts everywhere else, they also had plenty to say about the legal and regulatory regimes that constantly threaten them with ADA and CEQA lawsuits, as well as CARB compliance. Legislation, such as Senate Bills 84 and 981, would help alleviate those concerns but don’t think the legal and bureaucratic industries that have outsized influence on California public policy are not going to put up a fight.”

The NFIB Research Center has collected Small Business Economic Trends Data with Quarterly surveys since 1973 and monthly surveys since 1986. The sample is drawn from the membership files of the National Federation of Independent Business (NFIB), not broken down by state.

From NFIB Chief Economist Bill Dunkelberg

“Inflationary pressures continue to be a challenge for Main Street. While small business optimism is currently fragile, the benefits of the Working Families Tax Cut Act should start to feed into the private sector over the next few months.”

Highlights from the April SBET Include:

• The Employment Index fell in April, from 101.6 to 100.4. This is the second month in a row of decline. The current reading is now below the 2025 average of 101.2 but still slightly above the historical average of 100.0

• In April, reports of both actual and planned price increases rose. The net percent of owners raising average selling prices rose 5 points from March to a net 30% (seasonally adjusted), well above its historical average of net 13%. Looking forward to the next three months, a net 27% (seasonally adjusted) plan to increase prices, up 3 points from March.

• The net percent of owners expecting better business conditions fell 7 points from March to a net 4% (seasonally adjusted). This was the fourth consecutive monthly decline in expected business conditions and the lowest level since October 2024.

• In April, 7% (seasonally adjusted) reported that it is a good time to expand their business, down 4 points from March and the lowest level since October 2024.

Keep up with the latest California small-business news at www.nfib.com. Follow us on X @NFIB_CA and on Facebook @NFIB.CA.