High sales and increased profits made February a more positive month for many owners, but competition from large businesses is putting stress on Main Street firms as they navigate the current economic climate. Designed by Freepik

SACRAMENTO, CA (MPG) - From John Kabateck, state director for the National Federation of Independent Business (NFIB) in California, on findings from the monthly NFIB Small Business Optimism Index, which fell 0.5 points in February to 98.8 but remained slightly above the 52-year average of 98. The Uncertainty Index decreased three points from January to 88.

“With tax season upon us, I want to take this opportunity to once again thank every California small business owner who spoke up for keeping the 20% Small Business Tax Deduction alive and preventing it from expiring at the end of last year. I think of small business owners like Beth Booth from San Diego County, who is now chair of our leadership council, for traveling to Washington, D.C. to make a compelling case for preserving a valuable tool for small business solvency. It’s members like her and many others who provide optimism when it’s needed most.”

In conjunction with the February report, NFIB also released a new episode of the NFIB Research Center’s “Small Business by the Numbers” podcast. Listen to the latest episode here.           

“Although optimism declined slightly, small businesses report feeling more certain in February as they look toward the coming months. High sales and increased profits made February a more positive month for many owners, but competition from large businesses is putting stress on Main Street firms as they navigate the current economic climate,” said NFIB Chief Economist Bill Dunkelberg.

Highlights from the Latest NFIB Small Business Optimism Index include the following.

Seasonally adjusted, a net 34% reported raising compensation, up 2 points from January and the highest level since March 2025.

The frequency of reports of positive profit trends rose 7 points from January to a net negative 14% (seasonally adjusted). The last time earnings trends were this high was in December 2021.

The net percent of owners raising average selling prices fell 2 points from January to a net 24% (seasonally adjusted). This marked the third consecutive month that actual price increases slowed, though the changes remain well above the historical average.

When asked to evaluate the overall health of their business, 12% rated it as excellent (down 2 points), 55% as good (up 1 point), 26% as fair (down 1 point) and 5% as poor (up 1 point).

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

For over 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan and member-driven association. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.