Despite all the economic doom and gloom, US small businesses are doing just fine 

It’s easy to fall into the trap of believing that the economy is not doing well under the current administration.

Inflation is down, but Americans still feel an “affordability squeeze,” says Bloomberg. Fortune reports that an “E-shaped economy” shows a “growing divide between Americans.” CBS News states that the affordability crisis “continues to affect” many American households, especially when it comes to “food, housing, child care and health care.” Scripps reports that a quarter of U.S. households “struggle to cover basic expenses,” and according to the LA Times, there are “two Americas when it comes to the economy.” 

You would think that with all this discouraging news, our nation’s small businesses — consumers themselves, but who also employ almost half of workers and contribute nearly half of the country’s GDP — would also be suffering. But that doesn’t seem to be the case. The reality is that small businesses continue to profit and grow, despite the doom and gloom. 

For example, the National Federation of Independent Businesses, which for decades has published a closely watched index of small-business sentiment and optimism, reported that its index remains above its 52-year historical average, signaling strong confidence. The organization’s data found that many small businesses continue to perform well despite lingering economic uncertainty. 

Industry-level data indicate that a majority of small-business owners report stable or improving sales across sectors such as construction, manufacturing and professional services. Profit trends remain positive in many industries, and hiring demand continues as businesses expand operations. 

“While GDP is rising, small businesses are still waiting for noticeable economic growth,” said Bill Dunkelberg, the organization’s chief economist. “Despite this, more owners are reporting better business health and anticipating higher sales.”  

Fiserv, a large financial technology company that provides payments processing and banking technology to financial institutions, found that consumer spending at small businesses remained stable in February despite severe winter weather that reduced retail foot traffic. Its report highlighted “resilience in sectors such as restaurants, retail, and service businesses,” where consumers “continued to spend even amid weather disruptions.” This pattern suggests strong consumer demand and pricing power among small firms. 

According to the U.S. Small Business Administration, small businesses experienced “record levels of capitalism” in 2025, and reported increased lending volumes, rising new business formations, and expanding access to capital through its loan programs, suggesting that many entrepreneurs are confident enough to launch or expand businesses.  

But how about manufacturing? The Institute of Supply Management reported a second straight month of expansion among its members. According to The Wall Street Journal, “the index for new orders expanded for the second straight month after four straight readings in contraction, but was down slightly from January’s figure.” Production also expanded, and the “backlog of orders registered its highest reading since May 2022.” 

“In February, U.S. manufacturing activity remained in expansion territory, although growing at a slower pace than the month before,” said Susan Spence, chair of the Institute of Supply Management’s Manufacturing Business Survey Committee. “Of the six largest manufacturing industries, four (chemical products; machinery; transportation equipment; and computer and electronic products) expanded in February.”

The National Restaurant Association says that its restaurant operators are “cautiously optimistic” about the industry’s outlook for 2026, with projected foodservice sales expected to reach an all-time high of approximately $1.5 trillion — a 4.8 percent increase compared to last year. The organization’s survey found that many restaurant owners anticipate steady customer demand and continued growth in dining spending. 

On jobs, the actual employment data reported by the Paychex Small Business Employment Watch report (Paychex is a client of my firm) showed continued resilience, with the company’s CEO reporting that “the pace of job growth across our overall client base has been stable in February, with slight growth upmarket among U.S. customers with more than 50 employees, consistent with the last several months.” Paychex reported stable employment combined with steady wage growth, suggesting that many small companies are financially healthy enough to invest in their workforce.  

Dovetailing with Paychex, the editors at The Wall Street Journal recently wrote that “the unemployment rate has remained more or less steady at 4.4 percent — around what it was in 2017. The ADP payroll report and the Institute for Supply Management’s services report this week both showed job growth last month.” The labor market is very competitive. But small businesses aren’t backing down from finding talent. 

I don’t mean to pretend that everything is super and fantastic for small businesses or consumers. But we live in a big country, and things are never super and fantastic, for everyone. Some firms are doing better than others. Some regions are expanding faster than others. Labor remains a struggle. Adapting to all the price shocks over the past six years hasn’t been easy. Big, existential technology challenges around AI loom. Manufacturing expansion is still relatively weak. Firms in the construction and real estate industries are still waiting for their rebound.  

But for the most part, small businesses continue to remain resilient and growing. Many are counting on lower taxes, relaxed regulations and more stable prices and tariffs in 2026. If that happens — and those predictions seem reasonable — I’m betting we’ll see even stronger results as the year progresses. 

Gene Marks is founder of The Marks Group, a small-business consulting firm. 

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