US Small Businesses in October 2026: Stable on Main Street, Stuck on Hiring and Rising Costs

American small businesses are not collapsing in October 2026. They are not booming either. The picture coming out of this month’s surveys and economic data is more specific than either of those headlines: businesses themselves are holding steady, while the costs around them keep rising, customers keep getting pickier, and owners keep holding back on the two decisions that would normally signal confidence — hiring and expanding.

That split is the story of Main Street right now. Owners feel good about their own shop, restaurant, clinic, or firm, and uneasy about everything around it.

What the surveys actually say

Start with the numbers owners report about their own businesses, because they are stronger than the mood suggests.

The Small Business & Entrepreneurship Council’s October Check Up Survey, conducted September 11–19 among 516 owners with 2 to 99 employees, found 81% meeting or exceeding their financial expectations for 2026, and 61% reporting better performance than in 2025. Overall, 88% described their business as stable or growing, including 20% who said it is thriving and 42% reporting moderate growth.

Main Street America’s Fall 2026 survey tells a similar story from a different angle. It heard from 1,568 owners across all 50 states between September 3 and September 28. Average confidence in the next three months reached 7.5 out of 10, rebounding from a historic low in spring 2025 toward the near-peak levels of 2022–2024. The share reporting rising revenue climbed to 34%, up from 26% in spring 2025, and the share reporting rising net profit climbed to 26%, up from 16%.

The National Federation of Independent Business (NFIB) September survey, released in mid-October, is more cautious. Its Small Business Optimism Index slipped 0.8 points to 97.9, just below its 52-year average of 98.0, while its Uncertainty Index rose to 90, well above its historical average of 68. Only 7% of owners said it is a good time to expand, down 5 points from August.

Put together, the three surveys do not contradict each other. They describe the same business from three sides: performance is solid, confidence is recovering, and willingness to bet on the future is still low.

Costs are rising faster than revenue

The reason for that caution is visible in every dataset this month: revenue is growing, but costs are growing into the margin.

Main Street America found revenue improving faster than profit, which points directly at expenses eating into earnings. Its respondents named maintaining positive cash flow and managing inventory at sustainable costs among their top challenges.

The S&P Global flash PMI for October, reported by both Briefs and Reuters via The Economic Times, shows the same pressure at the economy-wide level. Overall business activity slipped slightly to 57.6 from September’s 58.4 — still firmly in expansion territory, since anything above 50 signals growth — but the output price gauge rose to 59.8, its highest since August 2022, as companies raised what they charge. The input price gauge stayed high at 64.9, down slightly from 65.9 in September. Delivery times worsened to their lowest reading in more than four years, with suppliers’ delivery performance deteriorating on material shortages, labor shortages, and shipping holdups.

Energy is doing much of the damage. The SBE Council survey ranks inflation as the number one economic concern at 39%, with gasoline and energy costs surging to number two at 29%, up from ninth place at 11% in its February survey. Economic uncertainty follows at 28%. A Forbes contributor analysis published October 24, citing the Bureau of Labor Statistics September CPI report, put consumer prices up 3.7% over the past year, energy prices up 20%, and fuel oil up 74%. Dynamic Capital’s fall analysis, using August data, put overall inflation at 3.4%, with gasoline alone up 27.4% from a year earlier while average hourly earnings rose only 3.0%, to $37.81.

For a Main Street owner, that gap is the whole problem in one line: what it costs to run the business is rising faster than what workers earn, and faster than what many customers are willing to pay.

Customers are still spending, but more carefully

Demand has not disappeared. S&P Global reported new orders at 58.2 in October, the highest since March 2022, driven largely by services and partly by precautionary stock building. The US Chamber’s Q3 Small Business Index found 71% of owners describing their own business as healthy and 72% comfortable with cash flow.

What has changed is how customers spend. The SBE Council survey found 36% of owners reporting lower customer spending over the past six months, against 29% reporting an increase. Among the behavioral shifts owners reported: 34% said customers are choosing lower-priced products or services, 28% see customers seeking discounts or promotions, 27% say customers compare prices more carefully, and 27% say customers take longer to decide or buy fewer items.

Forbes reported a similar split from its own small survey of 19 food and consumer-brand founders: 11 of 19 saw a divide between customers who keep spending and customers who pull back. Early data from NIQ’s 2026 Global Consumer Outlook, cited in the same article, found 39% of consumers trading down on packaged-goods brands and 34% shopping more often at discount stores.

The practical meaning for a small business is blunt. Raising prices is no longer a quiet decision. A price increase does not just lose one sale; it can teach a price-sensitive customer to try a cheaper competitor. That is why so many owners are absorbing costs instead of passing them on — and why absorbing them has its own bill, as the next section shows.

The bill for absorbing costs: hiring and expansion

When a business absorbs rising costs instead of raising prices, something else has to give. This month’s data shows what gives first: hiring, launches, and expansion.

The NFIB September survey named labor quality or availability as owners’ single most important problem at 26%, the top issue for the third consecutive month, with inflation second at 20%. The US Chamber’s Q3 index named inflation as the top challenge for 54% of owners, followed by revenue at 24% and supply chain issues at 16%.

The SBE Council survey found capital constraints limiting expansion for 54% of respondents, up from 43% in February. Hiring intentions remain positive on balance — 30% expect to increase staffing over the next six months against only 4% expecting reductions — but availability of skilled labor still constrains many firms, and 44% called it no concern at all, a reminder that Main Street is not one uniform experience.

Forbes’ small founder survey illustrates the trade-off in miniature, and it should be read as exactly that: a small sample of 19 founders from the author’s own network, not a national statistic. In that group, 13 said they had absorbed rising costs and accepted lower margins this year, while only 6 had raised prices. Nine had delayed hiring or cut staff, seven had delayed a launch or expansion, and six had cut or cancelled products. The broader NFIB finding — a net 31% of owners raised prices in September — is consistent with the same pattern: roughly one in three raised prices, the rest largely did not.

The Federal Reserve’s stance adds to the caution. The Fed raised its benchmark rate by a quarter point on September 16, to a range of 3.75% to 4%, its first hike since 2023, and economists cited in the Reuters report expected the Fed to hold at its next meeting and consider another hike in December. Borrowing for inventory, equipment, or a new location therefore costs more than it did earlier in the year, and may cost more again.

One bright spot cuts across the gloom: health care. Dynamic Capital’s analysis of the September jobs report — just 29,000 jobs added economy-wide, with unemployment at 4.2% — noted that health care added 17,000 of those jobs, and roughly three of every four jobs added over the past year. For Main Street, that matters twice over: clinics and practices themselves face capacity constraints rather than demand problems, and the contractors, cleaners, transport firms, staffing agencies, and suppliers that serve health care have a growing, reliably paying customer base.

What owners can actually do before costs climb again

None of this data tells an owner to wait for conditions to improve. The consistent advice across this month’s reporting points the other way: prepare while demand is still solid.

• Find your price ceiling before you need it. Work out, product by product and channel by channel, the price your customer will not cross, and design offers to land under it rather than hoping customers accept more.
• Read your contract dates now. Freight, packaging, fuel, and delivery surcharges often reset when contracts expire. Renegotiate before renewal, not after the new rate arrives.
• Make two lists: absorb and pass through. Decide in advance which products you will absorb costs on to protect traffic, and which you will raise prices on because customers will still pay. Doing this under pressure, item by item, is how margins disappear quietly.
• Protect cash before chasing growth. With rates higher and customers slower to pay, a few months of working capital is what lets a business take a good hire, a bulk inventory deal, or a new contract when it appears, instead of turning it down.
• Buy productivity, not just labor. Equipment, software, and scheduling that let the existing team produce more are the most direct defense against costs that keep rising regardless of headcount.
• Do not cut what made customers choose you. Cost-cutting that waters down quality, service, or values risks the repeat customers a Main Street business depends on most.

The bottom line for Main Street

October 2026 does not describe a Main Street in crisis. It describes a Main Street that is performing, adapting, and still holding back. Businesses are stable, confidence is recovering, orders are strong, and factory hiring is at its highest since March 2012. At the same time, energy and input costs are squeezing margins, customers are trading down and taking longer to buy, capital is harder to get, skilled hiring remains difficult, and only a small minority of owners think it is a good time to expand.

The businesses that come out of this stretch ahead will probably not be the ones that waited for costs to fall or rates to drop. They will be the ones that priced deliberately, locked in supplier terms early, protected cash, and invested in productivity while demand was still there to support it.

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Sources

• SBE Council, October 8, 2026 — “New Small Business Check Up Survey: Main Street Businesses Are Powering Through 2026”
• Main Street America, October 20, 2026 — “Main Spotlight: How Are Small Businesses Feeling This Fall?”
• NFIB, October 13–14, 2026 — “Uncertainty Grows and Optimism Fades Slightly on Main Street in September”
• US Chamber of Commerce, September 30, 2026 — Q3 2026 Small Business Index, “Current Challenges”
• Briefs, (S&P Global flash PMI) — “US Business Activity Near Multi-Year High in October”
• Reuters via The Economic Times, October 23, 2026 — “US business activity cools in October; strong demand fueling price pressures”
• Forbes, Lisa Curtis, October 24, 2026 — “Small Businesses Are Absorbing Rising Costs. Here’s What It’s Costing Them”
• Dynamic Capital, October 5, 2026 — “Slow Hiring, Higher Rates, and a Health Care Bright Spot: What Small Business Owners Should Make of the Fall 2026 Economy”

Note on figures: all numbers above are as reported by the cited source, with survey dates and sample sizes stated where the source provides them. The Forbes founder figures come from a small survey of 19 founders and are labeled as such in the article, not presented as national statistics.