MONTGOMERY, Ala. – Small business owners’ hiring plans are at the highest level since 2022, according to the National Federation of Independent Business’ July jobs report.
Up 9 percentage points from June, a seasonally adjusted net of 20% of small business owners reported that they plan to create new jobs in the next three months. That level is also 9 points higher than the historical average.
Though owners expressed plans to hire, 27% said that labor quality or availability was their most important problem, up 8 percentage points from June and 15 points from the historical average.
Bill Dunkelberg, NFIB’s chief economist, said that with this, employment growth fell behind the pace of economic growth last month.
“Most of the primary spending driving the economy is heavily concentrated in big projects like new data centers for AI,” Dunkelberg said. “Hiring plans suggest that small business owners are expecting a surge in business that will require more workers. While the labor force remains stagnant, hiring will be sufficient to keep the unemployment rate about the same as compensation inches higher.”
More than a third of small business owners – 36% – reported job openings that they could not fill in July, the highest number since June 2025. Thirty-one percent of owners had listings for skilled workers, a monthly increase of 4 percentage points, while 14% had openings for unskilled labor.
Actual hiring declined 1 percentage point from June, with 61% of owners reporting that they hired or tried to hire someone last month.
Unchanged from June, 51% of owners said there were few or no qualified applicants for their open positions they were trying to fill. Thirty-two percent said there were few, and 19% said there were no qualified candidates.
NFIB Alabama Director Rosemary Elebash said these national trends reflect the concerns the organization hears from small business owners in Alabama.
“Many owners have work available but cannot find qualified people to fill the jobs,” Elebash said. “That puts pressure on Main Street businesses and can result in longer waits, fewer services, and higher costs for customers.”
As both of NFIB’s wage measures increased, 8% of business owners reported labor costs as their single most important problem in July, unchanged from June. Adjusted seasonally, a net of 31% of business owners reported raising compensation in July and 19% said they plan to raise compensation in the next three months.
The findings come from a July survey of 887 responses from randomly selected NFIB members across the country.